Aite: Debit Cheaper Than Cash
A new report from Aité Group argued that cash actually is more expensive than cards for retailers, a conclusion that drew fire and praise from foes in the battle over interchange fees.
“Tender Truths: The Real Cost of POS Transactions in the U.S.,” found debit cards the least expensive method of payment for merchants, costing significantly less per transaction than cash or cards.It broke down the costs of different payment types across three broad retail sectors: specialty retailers, quick service restaurants and convenience stores. In each case, according to Aité Group Senior Analyst Madeline Aufseeser, debit interchange capped by regulation offered the least expensive form of payment.
“Merchants have always tried to avoid the topic of the value of card acceptance in their lobbying efforts, because they know it hurts their push for government price controls,” said Sam Fabens, spokesman for the Electronic Payments Coalition, an organization of credit union and other card issuers and payment processors formed to defend interchange.
“They always point to cash as their favorite method of payment, but maybe they should actually do the math and realize that it costs far more in time and money to accept cash than other forms such as debit. This report is another important piece of evidence that the value of acceptance far outweighs the cost.”