What’s cold, hard and yet still burns a hole in your pocket? It’s cash. And it’s certainly taking a beating in the news recently. And I think for good reason. Experts agree cash is expensive and inefficient – and yet 85% of the world’s transactions are still conducted in cash.
If you’re a regular reader of this space, you’ve probably thought about the value of electronic payments. But have you ever really thought about what cash actually costs? I think you would be surprised, as our new infographic points out. There are significant financial and social costs to cash.
And, in the US at least, cash leads to $1.5 trillion in underreported business income or lost tax revenue according to the same article. That’s no small amount, especially in these days of high public debt.
That’s why the austerity plans of Greece require that any payment over EUR 1,500 is conducted electronically, as reported in Reuters.
If time is money, you also can’t forget about the lack of convenience from cash. You can’t make online payments with it because no computer takes cash! And the lack of convenience doesn’t stop there… think about all the time you have to find an ATM or wait in line at the bank.
Beyond financial, there are social costs of cash too.
It is incredibly unhygienic. Bacteria, including eColi, are on 94% of US bills, according to Southern Medical Journal. One study reported in Science News even said that there are 20 bugs hosted on the cleanest US dollars and 25,000 on the dirtiest greenbacks. Gross, talk about dirty money!
Finally, and most importantly, cash does nothing to help those left out of the financial mainstream. There are more than 1 billion mobile phone users who lack bank accounts. Electronic payments using mobile phones act as a vital bridge for financial inclusion for these people.
So there you have it. The next time you use cash you should give second thoughts to what it really costs.
How does your household measure up? Take this quick poll to find out: