MasterCard Makes the Case for Ditching Dirty, Inefficient Cash

MasterCard is making the case for eliminating cash — not because credit is better, but because it’s cheaper.

The credit card company, located in aptly named Purchase, New York, explained in a blog post today that cash is expensive and inefficient to use, and yet 85 percent of the world’s transactions still rely on it.

To say that cash is expensive or inefficient might be confusing to some. After all, if you use cash to buy something, the merchant doesn’t pay a dime; you can withdraw cash from an ATM for free (if it’s your own bank), and nearly everyone accepts it.

Meanwhile, companies like MasterCard, Visa and even alternative payment providers like Square or PayPal, will take a percentage of the transaction to process it electronically. In that scenario, the merchant pays, and, by proxy, so does the consumer.

But here are some of the inconveniences of cash:

  • U.S. pennies and nickels cost twice as much to produce as they are worth.
  • Cash leads to $1.5 trillion in underreported business income to the IRS.
  • And it’s gross: Bacteria, including E. coli, are on 94 percent of U.S. bills.

If you agree, MasterCard is currently taking a poll on its blog to see what percentage of transactions you would like to conduct in cash.

And here’s a look at the infographic that MasterCard made to illustrate its point:

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work