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The price to pay – but how much?

The price to pay – but how much?. Backstage, Roskilde July 7th, 2012 Anders Mølgaard Pedersen Danmarks Nationalbank. The price to pay – but how much?. Backstage, Roskilde July 7th, 2012 Anders Mølgaard Pedersen Danmarks Nationalbank. Cash is king! ….

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The price to pay – but how much?

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  1. The price to pay – but how much? Backstage, Roskilde July 7th, 2012 Anders Mølgaard Pedersen Danmarks Nationalbank

  2. The price to pay – but how much? Backstage, Roskilde July 7th, 2012 Anders Mølgaard Pedersen Danmarks Nationalbank

  3. Cash is king! …. … but are cash payments cost-efficient?

  4. Cost of payment studies • Belgium • Banque Nationale de Belgique (2005), Coûts, avantages et inconvénients des differént moyens de paiement, Banque Nationale de Belgique. • Sweden • Bergman, Mats, Gabrielle Guibourg and Björn Segendorf (2007), The costs of paying – private and social costs of cash and card, Sveriges Riksbank Working Paper Series, No. 212. • Segendorf, Björn and Thomas Jansson (2012), The Cost of Consumer Payments in Sweden, Sveriges Riksbank Working Paper Series, No. 262. • Hungary • Turján, Dr. Aniko, Éva Divéki, Éva Keszy-Harmath, Gergely Kóczan, Kristóf Takács (2011), Nothing is free: A survey of the social costs of the main payment instruments in Hungary, Magyar Nemzeti Bank, MNB Occasional Paper, No. 93.

  5. Cost of payment studies • Norway • Gresvik, Olaf and Harald Haare (2009), Costs in the Norwegian payment system, Norges Bank, Staff Memo, No. 4. • The Netherlands • Brits, Hans and Carlo Winder (2005), Payments are no free lunch, De Nederlandsche Bank Occassional Papers, Vol. 3, No. 2. • Bolt, Wilko, Nicole Jonker and Corry van Renselaar (2008), Incentives at the counter: an empirical analysis of surcharging card payment and payment behaviour in the Netherlands, De Nederlandsche Bank Working Paper, No. 196. • Australia • Schwartz, Carl, Justin Fabo, Owen Bailey and Louise Carter (2007), Payment Costs in Australia, Reserve Bank of Australia. • Denmark • Danmarks Nationalbank (2012), Cost of payments in Denmark. • Jacobsen, Johan Gustav Kaas and Anders Mølgaard Pedersen (2012), Cost of Card and Cash Payments in Denmark, Danmarks Nationalbank, Monetary Review, 2nd Quarter, Part 1 (forthcoming).

  6. Three conclusions regarding the costs of cash from the studies – and a small reminder …

  7. Conclusion no. 1: ”Cash payments entail high costs to society”

  8. Cash payments entail high costs …

  9. Cash payments entail high costs …

  10. Cash payments entail high costs …

  11. Conclusion no. 2: ”All agents bear high costs due to cash”

  12. Cash payments are expensive for all agents …

  13. Cash payments are expensive for all agents …

  14. Cash payments are expensive for all agents …

  15. Cash payments are expensive for all agents …

  16. Conclusion no. 3: ”However, for small payments cash involves lower costs than other payment methods”

  17. Cash is cheapest for small payments …

  18. Cash is cheapest for small payments …

  19. And a small reminder: ”Other pros and cons but costs should be taken into account when assessing payment methods”

  20. Other pros and cons but costs … • Important aspects to consider include • Technological requirements • Ease and convenience • Various risks • Psychological factors • Anonymity • Accessibility

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