20
21
CMSPI – IAC State of the Industry Report
CMSPI – IAC State of the Industry Report
Total
$37.7
$8.3
$15.7
$61.6
Section 1.2.2 – Cost of Cash vs. Debit Cards Case Study WHAT IS THE TRUE COST OF CASH FOR MERCHANTS? The cost of cash acceptance for merchants is extremely complicated to accurately calculate. There are several different types of costs to consider, including fixed costs and variable costs, and many of these fluctuate significantly and can be difficult to quantify.
Total $0.0 $0.0
4 Party:
Interchange
Network
Acquirer
CP
$52.4 $90.7
$9.6 $9.6
$30.5
CNP Total
$143.0
$19.1
$30.5
$192.6
• Cash Costs for Merchants
Type
Total $0.0 $0.0
4 Party:
Interchange
Network
Acquirer
Processing cash transactions Stocking registers with cash Cleaning excess cash Changing receipt paper Receipt paper and ink Counting and sorting cash Preparing cash for deposit Transporting and depositing cash
Domestic
$138.4
$15.5
$30.5
International
$4.4
$3.6
Total
$143.0
$19.1
$30.5
$192.6
Front Office
Tables 1.1 – 1.4 – Breakdown of Card Fees Paid in the U.S. in 2023 (USD billions)) 21
2. Changing Payments Mix In the U.S. and many other countries, we have observed a gradual shift away from cheaper payment methods like cash towards more expensive tender types including Buy-Now-Pay-Later (BNPL) and other Alternative Payment Methods, or APMs. We are also seeing the cost of cash increase over time.
Back Office
POS terminals Software to record and analyze payments Buying or leasing cash storage (safes)
Infrastructure
Cash shortage, theft, and counterfeit Theft insurance premiums
Fraud, Losses, and Mitigation
Cash deposits Banknote and coin ordering
21 Footnote 21 Sources
Fees
Table 1.5 – List of Cash Acceptance Costs for Merchants 22
The most comprehensive report on the cost of cash over time available today is provided by the Kansas City Federal Reserve, which has collated studies looking at the evolution of cash costs in six countries: Australia, Canada, the Netherlands, Norway, Sweden and the United States. This
22 Kansas City Fed study
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