Comments on: The Cost of Cash http://countingoncurrency.com/wp/2010/02/24/the-cost-of-cash/ a resource for cash supply chain management professionals Mon, 12 Sep 2011 11:34:18 +0000 hourly 1 http://wordpress.org/?v= By: TWilhelm http://countingoncurrency.com/wp/2010/02/24/the-cost-of-cash/comment-page-1/#comment-225 TWilhelm Thu, 15 Apr 2010 20:34:59 +0000 http://countingoncurrency.com/wp/?p=2264#comment-225 this isn't even a good horse race...cash is cheaper by far to society and to merchants. assume a credit/debit fee average of 2% on a daily transaction base of $10,000...$200 to the merchant (there are other costs but I am a simple person) if it is cash, the armored charge, plus the bank charge for processing, plus the float cost (I used two days which is high) is about $60 (and there are other costs but I am keeping this simple) from a societal perspective, YOU, the taxpayer, own the currency and related interest income from the issuance of currency (okay, the Fed takes it operating budget from it too). also, if 70% of the value of US currency remains overseas, you can thank these folks for allowing the US Treasury to borrow $420 billion essentially at the cost of printing (at 5% that's $21 billion annually). Corporate "America" owns the card payments industry and benefits their shareholders. Using plastic is more convenient from a payer's perspective and maybe a "cleaner" transaction from a merchant's perspective since the handling/theft is less costly. I'll take cash, thank you. this isn’t even a good horse race…cash is cheaper by far to society and to merchants.

assume a credit/debit fee average of 2% on a daily transaction base of $10,000…$200 to the merchant (there are other costs but I am a simple person)

if it is cash, the armored charge, plus the bank charge for processing, plus the float cost (I used two days which is high) is about $60 (and there are other costs but I am keeping this simple)

from a societal perspective, YOU, the taxpayer, own the currency and related interest income from the issuance of currency (okay, the Fed takes it operating budget from it too). also, if 70% of the value of US currency remains overseas, you can thank these folks for allowing the US Treasury to borrow $420 billion essentially at the cost of printing (at 5% that’s $21 billion annually).

Corporate “America” owns the card payments industry and benefits their shareholders. Using plastic is more convenient from a payer’s perspective and maybe a “cleaner” transaction from a merchant’s perspective since the handling/theft is less costly.

I’ll take cash, thank you.

]]> By: msnow613 http://countingoncurrency.com/wp/2010/02/24/the-cost-of-cash/comment-page-1/#comment-204 msnow613 Thu, 25 Feb 2010 22:18:36 +0000 http://countingoncurrency.com/wp/?p=2264#comment-204 Currency is heavily subsidized by governments and banks. Take that away and no one could afford to use it. For my part I try to use as little as possible. I cannot wait until my smartphone can be used to tranfer funds P2P or P2B. Currency is heavily subsidized by governments and banks. Take that away and no one could afford to use it. For my part I try to use as little as possible. I cannot wait until my smartphone can be used to tranfer funds P2P or P2B.

]]> By: DanL http://countingoncurrency.com/wp/2010/02/24/the-cost-of-cash/comment-page-1/#comment-202 DanL Thu, 25 Feb 2010 02:24:40 +0000 http://countingoncurrency.com/wp/?p=2264#comment-202 The argument that retailers, cash-intensive retailers, make about cash vs cards includes several elements. (1) A retailer pays a fee for each & every credit & debit card transaction, think of it as a bank fee; but the retailer only pays a single fee for his/her cash deposit to the bank. So, at the margin, each cash transaction is a pure time/motion cost event (with much of that cost essentially fixed), and the bank fee component is zero. Conversely, each card transaction has its time/motion component (which may be lower, or faster, than cash, but still the much of the cost at the cashier line is fixed. And it has a bank fee. (2) The cost of cash is defrayed some, especially in the supermarket industry, by cashback. Something that draws consumers to the enterprise (rather than to a bank branch or ATM) and helps the retailer unload excess cash. This benefit is not available for card transactions of course. The argument that retailers, cash-intensive retailers, make about cash vs cards includes several elements. (1) A retailer pays a fee for each & every credit & debit card transaction, think of it as a bank fee; but the retailer only pays a single fee for his/her cash deposit to the bank. So, at the margin, each cash transaction is a pure time/motion cost event (with much of that cost essentially fixed), and the bank fee component is zero. Conversely, each card transaction has its time/motion component (which may be lower, or faster, than cash, but still the much of the cost at the cashier line is fixed. And it has a bank fee. (2) The cost of cash is defrayed some, especially in the supermarket industry, by cashback. Something that draws consumers to the enterprise (rather than to a bank branch or ATM) and helps the retailer unload excess cash. This benefit is not available for card transactions of course.

]]>