How Much Does it Cost Businesses to Accept Cash Payments?

handful of coins

You may not have thought about it much but, for businesses, accepting payments in cash is not free.

That’s right. There’s a lot of talk about the cost to businesses of taking debit and credit card payments, but not so much about accepting bits of metal and paper instead.

Accepting cash involves a lot of costs, some more obvious than others.

First, businesses typically have to pay to deposit cash with their bank. Here’s a quick look at the fees that banks charge small businesses for doing this:

  • NatWest’s standard tariff: 70p per £100
  • Lloyds: £1 per £100 or 80p per £100 over £1500 per month
  • Royal Bank of Scotland: 70p per £100
  • Barclays Business Current Account – Mixed Payments Plan: 90p per £100

Then there are other costs of handling cash. These include:

  • Theft by staff
  • Time spent counting cash
  • Keeping enough change
  • Physical security
  • Transporting cash to the bank

When all these costs are taken into account, accepting a cash payment can easily cost a small business, on average, 1% or more of the value of that payment. It can conceivably be more expensive for a businesses than accepting a debit or credit card payment.

What do you think? Is cash secretly a rather expensive way to accept payments?

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