alt Hacker NewsPeople often say that but does the cost for handling cash really scale (even approximately) proportionally with the number of transactions or revenue?
Or is it more binary that you have to decide, you either handle any cash and have the cost associated with it, or you refuse to take cash at all? If the latter is the case, then avoiding cash altogether seems somewhat unrealistic where I am from. And if it doesn't scale then it makes a lot of sense cost-wise to try to do as many of your transactions with cash as possible.
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> but does the cost for handling cash really scale (even approximately) proportionally with the number of transactions or revenue?
Yes, it sounds weird but it does
- Providing change is a pain and it's a "fixed time" cost
- Moving money around (also some banks charge for money deposits for commercial accounts)
- Dealing with "shrinkage" in various ways (even if you have insurance)
Depends on, sure there is some "efficient frontier" where it flips.
Think about all the supermarket chains, handling millions of cash daily; in my region, those are relying heavily on outsourced cash recycling companies - why? Its more effort/cost if they would do this themself.