3 PAYMENT METHOD SCORECARD: CASH
Cost
Fixed Costs The fixed costs required to accept cash payments can be very low for merchants: in theory they can accept cash payments using just a calculator, a secure storage bin, and a bank account. Additional costs include those needed to deposit cash accepted at the POS – which can involve complex supply chains including Armored Transport carriers, cash processors and banks – as well as security precautions including camera security for both first- and third-party theft mitigation. On-site cash handling can incur large labor costs for merchants. However, these cost considerations are included in the cost of payments analysis and are reflected in the Average Fee Level score, so we have not included them here to avoid double counting. Consumer/Bank Costs Rewards Cash does not typically offer consumer rewards in the same way credit card transactions often do. This may explain some of the demographic trends observed, as credit card rewards are often harvested by higher income 795 and younger consumers. 796 Interest Payment on Debt Cash typically does not provide opportunities for users to accrue debt and therefore does not
Metrics
Weight Score
Average Fee Level
15% 5.0 10% 2.0
Competitive Leverage
Competition within Payment Method
15% 3.0
Fixed Cost Rewards
10% 5.0 15% 1.0 15% 5.0 20% 5.0
Interest Payment on Debt
Surcharging TOTAL SCORE
3.8
Merchant Costs Average Fee Level
We estimate the weighted average cost of cash acceptance across six countries as 0.92%. Refer to the Cash Profile for the cost of cash analysis. Competitive Leverage Cash is still widely accepted because of consumer preferences. Some governments like Australia are interested in keeping cash around and potentially mandating cash acceptance for businesses supplying essential goods and services. 794 Competition within Payment Method There are low barriers to entry in armored transport and relatively low profit margins, however regional monopolies can exist, and cash processing has high barriers to entry/profit margins. See the Supply Chain Structure section in the Cash Profile for more information.
incur interest. Surcharging
Some countries encourage providing discounts when consumers are willing to pay with cash to avoid higher fees.
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