Something many retails and customers forget is that cash isn’t free. The European Commission (EC) calculated that the total cost to society of all payment methods including cash, cheques and payment cards equates to 2%-3% of European GDP.

To put this figure into context, it should be remembered that the entire EU agricultural sector equates to 2.1% of GDP, which means we may spend more on the payment process of buying food than we do on the food itself.

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The EC estimates that cash accounts for more than two-thirds of the total cost. McKinsey, the consultants, have estimated that "society spends about €200 (£160) a year per person to cover the cost of cash" and the "real" cost of cash to a retailer is 1.3% of the purchase price – around the cost of a fixed terminal (cheaper than mobile point of sale (mPOS)) card transaction charge. The Dutch central bank has published a similar study, estimating the annual cost of cash at €300 per family.

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A report from MasterCard in 2014 details "the true costs" of conducting business in cash. Costs associated with cash payments include the costs of processing cash — time spent accepting it, counting and recounting to balance the till and taking cash deposits to the bank.

All that time on cash management activities could be spent on things that add value, the study reports. There is also the cost of securing cash, including security systems and personnel, and the cost of cash that is lost, either by employee errors or theft.
One big barrier to small businesses accepting card payments through mPOS or fixed terminal is that they are landed with the costs of both. Retailers and merchants are often, in the UK for example, not allowed to refuse cash.

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