Acta Informatica Pragensia 2016, 5(2), 192-207 | DOI: 10.18267/j.aip.942978

Electronic Payments Profitability Extent Model

Rudolf Vohnout1, Zora Říhová1,2, Iva Dostálková1
1 Institute of Applied Informatics, Faculty of Science, University of South Bohemia in Ceske Budejovice, Branisovska 1760, 370 05 Ceske Budejovice, Czech Republic
2 Department of Systems Analysis, Faculty of Informatics and Statistics, University of Economics, Prague, W. Churchill Sq. 4, 130 67 Prague 3, Czech Republic

Cashless payments are recent phenomena, which even increased with the introduction of contactless means like NFC, PayPass or payWave. Such new methods speed-up the entire payment process and in comparison to cash transactions are much simpler and faster. But on the other hand the key question for merchant is if it is worth to have such device, which accept these new payment means or not to have the terminal at all. What is the amount of cash flow, which delimits the cash holdings to be still profitable? This paper tries to give answers to such question by presenting general profitability model, which will address defining the cash threshold amount. The aim is to show that cash holdings could be profitable up to certain amount, but after the threshold is met, cashless payment methods are fairly superior despite their additional costs.

Keywords: Cashless, Contactless, Card, Fee, Merchant, Payment, Transaction

Received: October 16, 2016; Revised: December 8, 2016; Accepted: December 14, 2016; Published: December 31, 2016  Show citation

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Vohnout, R., Říhová, Z., & Dostálková, I. (2016). Electronic Payments Profitability Extent Model. Acta Informatica Pragensia, 5(2), 192-207. doi: 10.18267/j.aip.94
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