There has been a lot of excitement around alternative payment methods such as mobile wallets. But the impending demise of cash may be a little exaggerated. Cash is very resilient and not going away anytime soon.
However, an interesting study by the Fletcher School at Tufts University concludes that there are hidden costs associated with continued use of cash. Households, businesses and government all pay a price for the love-fest with folding money.
For businesses, the biggest cost of cash can be linked to theft, followed — at a considerable distance — by ATM operations and cash transit.
The Tufts report estimates that continued use of cash traps $200 billion in value within the economy.
The study estimates that cash payment volume will decline at a rate of just 2 percent per year in the United States and the issue of cash displacement necessitates concerted effort from all stakeholders.
Is the industry listening?
The entire study, "The Cost of Cash in the United States," is available online. The report is part one of a series on the cost of cash around the world, including Egypt, India, and Mexico.
Following is an infograph released with the report:
Read more about trends and statistics.
Harish is president and COO at ESQ, a leading provider of business transaction management solutions. His extensive background in IT includes work with NCR and Tandem and skills in business development, product and strategic alliance management and more.