There are so many counterfactuals to your statement that it at least deserves mention:

Walmart/Nakumatt physical store

Cash is always better because it has no direct risk but:

1. Cash can be more easily stolen

2. Cash can be skimmed by employees

3. Cash takes time to be able to be used elsewhere (i.e. you typically have to deposit it into a bank in order to pay vendors)

4. Cash is difficult to account for in real time

5. Cash is hard to physically move in branch networks

6. Cash is annoying for some buyers (i.e. those who want to buy more product than they have cash for in their pocket)

A 1% fee to use money that is instantly available and represents the full liquid assets of a consumer and is harder to steal is worth the cost hands down - and I think most thoughtful business people would agree.

Kili.io - OpenStack for Africa: kili.io

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On Thu, Jan 9, 2014 at 10:41 AM, Mbugua Njihia <mbugua.njihia@gmail.com> wrote:

The numbers on some alternative payment channels are; Safaricom on its Lipa na Mpesa service takes 1% of each transaction value, Equity Bank with their transport centric service BebaPay which is in partnership with Google take 5%, while PesaPal a payment services aggregator levies a 3.5% transaction fee on e-commerce, bill payments and invoicing and 5% on ticketing.

For service based businesses, these transaction fees could be considered okay, but for those moving product, a deeper analysis will reveal why adoption may be stifled.

More here - http://www.mbuguanjihia.com/business/mobile-money-versus-cash-devil-details.html

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