The total cost of handling physical cash in the German economy has been estimated at EUR12.5 billion per year, by a team of academics in Berlin. The study, conducted by the Research Center for Financial Services at Steinbeis University, found that each German citizen pays around EUR150 per year to keep the cash system running.
Cash costs add up throughout the whole cash cycle: from production costs, transportation costs, insurance costs, cash handling, security and through to losses of interest. With EUR6.7 billion, the largest burden is carried by merchants, followed by banks with EUR4.5 billion.
The study explores a number of ways countries can reduce cash payments including implementation of limits for cash transaction amounts that exceed a specific level and banning/ limiting cash payments for cigarettes and other cash-based vending machines.
The report’s author Professor Jens Kleine says: „In order to reduce the cost of the payment system, individuals need to understand the real costs of the different payment methods.”
Javier Perez, President of MasterCard Europe, commented:“The use of cash, which is still significant in many countries around Europe, comes at a high cost to the economy. We believe that innovation in electronic payments not only delivers greater transparency of transaction but, as we see from today’s report, creates a more cost effective way of paying for all stakeholders.”
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
