Can Cash Usage Reduce in Europe - A Travellers Perspective

Last year I wrote about a town called Middelburg in Holland, a main tourist location where simply you could not change foreign currency, in fact the nearest place was a one and a half hour drive away. Great you say everything on cards, except that a lot of places did not take Visa or MasterCard – horrible credit brands only VPay or Maestro.
We are though always being told that cash is dead or dying, after all it is 2,500+ years since the first use of coins as payment tokens but if one looks at the numbers:

• Banknotes across the Euro zone is increasing by 9% per annum
• 40% more dollar bills available than at the beginning of the millennium
• 70% of all consumer transactions globally are cash by volume, but less than 15% by value

So why is cash so still so strong, surely retailers love cards and would be keen to drive customers to use them. The argument though, despite what the card schemes may claim is not that clear.

• IKEA state that cash costs €0.03 per transaction (with the exception of France, which is higher because of cash handling charges) in direct costs, but they don't count costs such as having to build safes in each store.
• The British Retail Consortium state that the cost of a typical cash transaction in 2012 was
• 1.5p per transaction – although no clear if indirect costs are considered

1. Cash accounts for 54.4 per cent of transactions - yet only accounts for 10.3 per cent of costs;
2. Debit cards account for 30.0 per cent of transactions - and account for 35.1 per cent of costs;
3. Credit and Charge cards account for only 10.6 per cent of transactions - but account for a staggering 50.1per cent of costs;
4. Non-cash non-card payments now account for 5.0 per cent of transactions and for 4.5 per cent of costs.

• The average cost to handle a transaction based as a percentage of total sales turnover for that payment type is:

1. o Cash – 0.16%
2. o Debit Cards – 0.32%
3. o Credit and Charge Cards – 1.04%
4. 

Other sources though place it higher, when direct and indirect costs are considered:
• The Swedish Central Bank has estimated the cost per transaction €0.25
• McKinsey place cost of cash at 1.3% cost per transaction
It is argued though by many that accepting cards offers the retailer the ability to obtain higher transaction values, and this seems to be borne out by the BRC research that shows the average card transaction in the UK is double that for cash.

And this is recognised by retailers it is claimed as the charge below shows retailers see the benefit of accepting other payment in that it can increase sales:

This is all great in theory, but as I travel at the moment through France I note on toll booths it says no VPay or Maestro, as I go to tourist locations the signs like those below are all too common – no cards, cheque or cash only.