The cost of using cash and checks in Uruguay

Marcelo Álvez (), Rodrigo Lluberas and Jorge Ponce
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Marcelo Álvez: Banco Central del Uruguay

No 2019004, Documentos de trabajo from Banco Central del Uruguay

Abstract: The incorporation of new technologies to financial activities imply challenges and opportunities to financial authorities. They are reacting to the unavoidable trend towards digitalization of financial activities with the objective of preserving stable and efficient payment and financial systems. Uruguay, for instance, has promoted the use of electronic payment instruments and tested in the real economy a central bank digital currency called e-Peso. Digitalization of payment systems would reduce transaction costs by (partially) replacing less efficient means of payment, e.g. paper-cash and checks. In this paper we find that the cost of using cash in Uruguay is approximately 0.61% of GDP. Interestingly, 98.1% of this cost is borne by the private sector: banks and retailers 77.1% and households 21.0%. The cost of using checks is equivalent to 0.04% of GDP. Overall, replacing paper-cash and checks by other (electronic) means of payment would imply a transaction cost reduction for the private sector of the equivalent of up to 0.65% of GDP.

Keywords: payment system; cost of cash; cost of checks; electronic payments; sistema de pagos; costo del dinero; costo del cheque; pagos electrónicos (search for similar items in EconPapers)
JEL-codes: D12 D23 D24 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2019
New Economics Papers: this item is included in nep-mon, nep-ore and nep-pay
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Related works:
Journal Article: The Cost of Using Cash and Checks in Uruguay (2020)
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