While watching my local hockey team lose their first playoff series after not qualifying for nine years, I was inundated by commercials trying to convince me that MasterCard is better than cash. In almost every commercial break the ad would run – I saw it so many times I can almost repeat the dialogue word for word. But, did that advertising convince me to stop using cash? There is more to the story before I reveal the answer…

The MasterCard commercial goes something like this – while watching a live hockey game (obvious venue for a hockey playoff commercial) one couple notices that another couple seated one row in front of them are using their MasterCard to pay for small purchases like soft drinks and hotdogs. While commenting on this “unique” behaviour, the couple buying the food respond that using their MasterCard is so much easier and faster than using cash – and safer too. Now me being a very big supporter of cash, I am obviously biased to believe cash is usually faster and easier. The question of safety however hangs in the breeze, as both forms of payment have risk.

Is a credit card safer than cash? Both can be stolen, definitely. A credit card can be reported stolen and will no longer work. If your cash is stolen, it is gone. So really, which is safer? Before I could find and answer to this, I came across an article from on the Finextra website, titled “US charges eight over $45m ATM theft“. The article describes the following facts of the case:

The scam saw hackers spend several months working to gain access to the computer networks of credit card processors, stealing pre-paid card details and upping the balance limits, say court filings. The data was then sent to cells of ‘cashers’ around the world who used it to make counterfeit cards before being sent PINs to make ATM withdrawals.

The first operation carried out by the gang, on 22 December, targeted a processor that dealt with transactions for pre-paid MasterCard debit cards issued by the National Bank of Ras Al-Khaimah PSC in the UAE. More than 45000 transactions were made using the stolen information, costing the bank and processor around $5 million.

The second attack, on 19 and 20 February, targeted a processor that serviced MasterCard pre-paid debit cards, this time issued by the Bank of Muscat, in Oman. In just 10 hours casher cells in 24 countries executed 36,000 transactions and withdrew about $40 million from ATMs.

WOW – $45 million dollars! Although the criminals were caught, not all of the cash was recovered. Who pays for this? All credit card companies will tell you that the cardholder is not responsible and that the losses, if unrecoverable, are covered by the company. But where do they get the money? From fees charged to retailers and interest charged to those who do not regularly pay their whole balance each month. So really, all cardholders pay the cost of stolen or hacked cards.

Is cash or a credit card easier. While MasterCard is spending significant dollars looking for “interns” to prove this point in a series of TV commercials, I think the true answer is this – pay with cash, receive your change and that is the end of the transaction. Pay with a credit card, sign the slip or enter your PIN code and … that’s not the end of the transaction. You will still have to wait for your next statement or check on-line to make sure you were charged correctly and then pay your balance. That seems like a whole lot more effort to me.

In the final analysis as to whether MasterCard is better than cash (or any credit card really), I offer the following checklist:

• Can a criminal steal personal information from the notes in my wallet?
• Is it really easier to use a credit card?
• Is a credit card transaction really faster?
• Can you track my cash payments and build a profile of me to sell to advertisers?

After careful consideration of the answers to those questions and anecdotal comments from associates, friends and family – is MasterCard better than cash? No! Is any credit card better than cash? No!

There you have it – cash wins almost every time – no matter how the credit card companies spin their research, cash is still king in the payments world!