Digital cash offers reduction in cost for banks in several ways.
First of all, processing effort might be lower than with existing post-pay cards since single transactions need not be authorized on line, debited from the customer's account or printed for the customer. This will be particularly true for small amounts of payment.
Furthermore, the current card system requires widely trusted, tamper-resistant devices at all points of entry to transaction systems. Such a requirement implies substantial initial agreement, outlay, and commitment to design, and can be expected to result in technology that is outdated when systems come into widespread use.
With the security measures built into the electronic wallet mentioned
above, fraud costs and costs for clarifying disputed transactions
could be reduced. Nowadays, card fraud is a very important
problem.
The same argument applies also to
card counterfeiting and forged bank notes.
Other costs linked to normal cash are costs for printing and mailing statements to customers, or the costs for handling cash and for cash dispensers. These could be reduced with home banking possibilities, i.e. transactions that can be made using your personal computer at home.
If the digital cash system implemented were anonymous, it would also reduce the sensitivity and the quantity of consumer data in the hands of the bank and by the same token, it reduces their exposure to incidents that might incur legal liability or hurt their public images.