How We Pay (1/7): The Real Cost of Cash

The first of a seven-part series on how we pay. Cash is routinely described as the free payment method par excellence. No fees, no intermediary, no account to open: a banknote passes from hand to hand and the transaction is settled. That is an accounting illusion. Cash has a cost. It is simply paid for by everyone, all the time, and by no one in particular. That is what makes it invisible.

The material cost, first. Producing, securing, transporting, counting, storing, destroying and replacing banknotes mobilises entire supply chains: printing works, armoured carriers, vaults, cashiers, insurers. A study reported in Morocco put the total at roughly 0.8% of the country's GDP. The figure should be handled with care from one country to the next, but the order of magnitude is telling: a fraction of national wealth devoted solely to moving paper around.

The cost of risk, next. A stolen note is lost. A burnt note is lost. A note handed to the wrong person is lost. No recourse, no proof, no possible dispute. Cash transfers the risk entirely onto whoever carries it — and whoever carries it is usually the person with the least margin to absorb it.

The cost of time, too. Queuing to withdraw. Queuing to deposit. Counting, recounting, checking for counterfeits. Waiting for a supplier to find change. Every minute spent handling cash is an unproductive minute, multiplied by millions of daily transactions.

The cost of invisibility, finally. It is the heaviest and the least visible. A cash transaction leaves no trace. That means a merchant cannot prove their revenue when applying for credit, an employee paid in cash cannot document their income, a company cannot demonstrate that it paid what it owed. The absence of a trace is not freedom: it is exclusion. It closes off access to credit, to insurance, to formality, to social protection.

One might think this diagnosis belongs to the past. The continent now handles close to three quarters of the world's mobile money volume. Gabon itself saw its number of electronic money accounts grow by more than 30% in 2025, and merchant payments by phone are growing by nearly 30% year on year.

And yet. A report published last June by the Mo Ibrahim Foundation, the Yale International Leadership Center and a Ghanaian digital banking platform points to an uncomfortable fact: more than 90% of the value received in mobile money is withdrawn as cash almost immediately. The digital infrastructure exists. Economic behaviour, however, remains that of cash. In other words, we have built motorways and we keep walking alongside them.

Which leaves the question worth pausing on, rather than repeating that people prefer cash. People do not prefer cash. They prefer what is accepted everywhere, what costs nothing to use, what does not expose them to a fee on every movement, and what does not ask them to choose between three networks that do not talk to each other. As long as withdrawing cash remains the simplest way out of those constraints, cash will win — not because it is good, but because the alternatives are not yet good enough.

If the cost of cash is real, then every transaction that shifts to a traceable rail is a net gain for the economy: less loss, less risk, less wasted time, more evidence. The question is therefore not how to convince people to abandon cash. It is what, in the design of today's systems, keeps cash rational. I will open that question in the next article in the series, looking more closely at who is genuinely excluded from financial circuits — and why it is almost never a matter of willingness.

Sources: study reported by L'Observateur du Maghreb (cost of cash ≈ 0.8% of Moroccan GDP, 2024); Affinity Africa / Mo Ibrahim Foundation / Yale ILC report (June 2026); DGEPF sector outlook notes, Q4 2025 and Q1 2026.