Digital payments can feel inevitable, sweeping all before them. A range of recent news items suggest this isn’t true.

For the first time in years, cash usage has risen in the UK, and not by a small percentage. The British Retail Consortium conducts an annual Payments Survey which covers 35% of the UK’s retailers, and this is the first time since it started the survey in 2013 that it has seen an increase.

Danmarks Nationalbank has carried out an analysis of the role of cash in a low cash usage society.

The Chief Minister for Bengal has questioned the government’s focus on cashless transactions.

We report all too frequently on payments system failures – see the end of this article for a recent example. But it is interesting that the Governor of the Reserve Bank of Australia (RBA) has recently chosen to draw attention to the performance and reliability of Australia’s new payments platform (NPP), particularly noting the need and priority of improving the ‘resilience of Australia’s payments and market infrastructure’.

In addition to the British Retail Consortium providing detailed information on the cost of payments in the UK, the Payment Systems Regulator (PSR) has recommended a cap on cross-border interchange fees, following its market review of the fees.

Mastercard’s Asia-Pacific lead for blockchain and digital assets has spoken about CBDCs in the region. He argues that consumers are so comfortable with existing payment options that a CBDC is not justified.

Perhaps a minority story, but a real life example of the strange things people do with banknotes. In Uganda, there is a trend for florists to design bouquets using banknotes.

A Payments Canada survey has found that 31% of Canadians use cash for day-to-day purchases, with speed (38%), wide acceptance (38%) and the ability to pay without borrowing (25%) the key motivators. Budgeting, privacy, convenience, cost of paying and security are also important.

Artificial Intelligence (AI) roared into the public consciousness in 2023. Its widespread use and, more importantly, its potential have become visible to all, not just the small specialist user community that has been working on it for years. Clearly, AI is of great interest to central banks from the policy makers through the cash issue department.

The latest International Monetary Fund (IMF) has published a blog which highlights its Central Bank Digital Currency (CBDC) Virtual Handbook. It draws attention to the explosion of interest in CBDCs and the need to design them appropriately.

Uniquely amongst payment options, cash offers people payment privacy. A key part of the debate about Central Bank Digital Currencies (CBDCs) is about the extent to which a CBDC can mimic the privacy achieved by cash. A new Bank for International Settlements (BIS) working paper considers designing CBDCs for privacy protection and data governance1.

One thought that came from the Future of Cash conference was the need to understand digital payments more. A recent conference paper from Vietnam does just that as it examines why people in the developing world move to digital payments by studying the uptake of mobile money services in Vietnam.

For countries experiencing ‘less cash’, it is becoming normal to measure the distance people must travel to access cash from an ATM, or in Canada’s case and automated banking machine (ABM), or branch of a financial institution. The Bank of Canada has released a paper describing its travel- based metric and the results.

The Future of Cash conference was one of those rare opportunities to step back and think. A series of experts presented data, research and conclusions from the real world about cash and its role in the payment hierarchy.

The Future of Cash conference in Istanbul, which took place 6-8 November, saw some big conversations about cash today and its future. The mood was more upbeat than in recent years as transactional demand for cash has largely rebounded from the lows of the pandemic and the access to cash agenda has gathered pace in countries facing the reality of less cash.

It is unusual for a commercial bank to describe its cash strategy, and so it was particularly good to hear NatWest, one of the UK’s big four high street banks, do this at the Future of Cash conference in Istanbul.

A paper published by the Munich Personal RePEc Archive has carried out secondary research on Africa’s adoption of CBDCs.

Japan has recently experienced a system failure that affected credit card payments at transportation hubs and shops.

A new paper has looked at the cash in circulation in 17 economies between 2001 and 20221.

Geldmaat runs the ATM network for the Netherland’s largest banks. This utility approach to ATM provision has strict service level agreements. Despite this the media in the Netherlands has reported that 5% of ATMs were broken at some point in September.

If a general can choose the battlefield, they can shape what happens next in the fight that follows. At the Future of Cash conference Brett Scott, the author, explained how the digital leaders have created and driven the story that digital is good and analogue is bad.

Bancomat AB was registered in 1968 in Sweden, and it is the second oldest ATM operator in the world. It was incorporated in 2010 and is owned by Danske bank, Nordea, Handelsbanken, SEB, Swedbank and some savings banks.

Mastercard’s CFO, speaking recently at a UBS conference, has raised issues with India’s Unified Payment Interface (UPI) system. Describing it as ‘fantastic at many levels’, he also said it was an ‘incredibly painful experience’ for its ecosystem participants.

The Reserve Bank of Atlanta has made some observations about the Merchant Risk Council’s 2023 Global Ecommerce Payments and Fraud Report.

Two recent pieces address the usefulness and role of CBDCs. One explores the theoretical benefits of a CBDC in a high inflation environment, the other the impact of a CBDC if a loss of confidence in the banking system leads to a run on the banks.

The Bank for International Settlements (BIS) has used decentralised finance (DeFi) technology concepts on a public blockchain to trade and settle hypothetical euro, Swiss franc and Singapore dollar wholesale CBDCs across borders between simulated financial institutions.

An International Monetary Fund Financial Access Survey has confirmed that Ugandan banks are switching their spending to digital channels and away from branches and ATMs. There has been an exponential growth in mobile money services.

Moody’s Investor Service has published a report on ‘Decentralised Finance and Digital Assets’. In it, it has raised concerns that the Aadhaar identification system, which is based on biometric technologies, is unreliable due to India’s hot and humid conditions, resulting in ‘service denials’.

The International Mint Industry Association (IMIA) has issued a position paper on the European Commission’s (EC) draft regulations on the legal tender of euro banknotes and coins. The paper also refers to the EC’s proposals about a possible digital euro. Although supportive of the initiative, the IMIA highlights a number of concerns.

The Emerging Market and Europe ATM and Cash Summit in Dublin focused on the future role of ATMs in a changing world. In addition to the keynote speech by the Dutch National Bank, supported by a Geldmaat presentation, Bancomat from Sweden, LINK from the UK and the ECB also covered the changing role of cash.

Geldmaat spoke at the ATMIA summit following on directly after the Dutch National Bank. It described how it came into being and the challenges it faces.

At the recent ATMIA Emerging Markets and Europe ATM and Cash Summit, the Dutch National Bank (DNB) presented on access to cash.

As noted in the summary of the recent Emerging Market and Europe ATM and Cash Summit in Dublin, the focus was on understanding the future of ATMs in a changing cash environment. As such there was a strong ‘Future of Cash’ feel to the agenda alongside more technical ATM perspectives and topics.

Australia’s fifth largest bank, Macquarie Bank, has announced that from November 2024 it will no longer handle cash and will also end cheques.

The Centre for Economic Policy Research (CEPR) has published a paper questioning whether the design of the digital euro could already be undermining its chances of success.

As published in our sister publication Currency News™, Giesecke+Devrient (G+D) held its Currency Technology Symposium 2023 in July in Munich, the main themes of which were resilience, hyper-efficiency and sustainability within the cash cycle and generally the role of cash in today´s world.

The CBDC Conference took place in Istanbul 12-14 September, with over 60 speakers, 40 central banks and 200 delegates meeting to consider the state of play for CBDCs.

Understanding the difference between banknotes used for transactions and those used for non-transactional purposes is a perennial issue for central banks.

The Future of Cash conference typically attracts some 120 participants from central and commercial banks, CIT and cash management companies, academics and other cash cycle stakeholders. The 2023 event takes place 6-8 November in Istanbul.

Dr Wolfram Seidemann, CEO of G+D Currency Technology, pointed out at the company’s July Currency Technology Symposium that it’s not only about the resilience of the existing cash cycle, but it’s also about innovating the new cash cycle.

The Reserve Bank of Australia (RBA) has been researching CBDCs. Its latest work found legal, regulatory, technical and operation issues that suggest an early launch of a CBDC is unlikely.

As noted in another article this month, the CBDC Conference took place in Istanbul 12-14 September. This article reports almost entirely on the central bank perspective on CBDCs, particularly the use cases justifying their use.

New Jersey, in the US, has made a law limiting surcharges applied by merchants on consumers who prefer to pay by card rather than by cash.

A new study published in the Munich Personal RePEc Archive looks at what influences consumers’ decision to use cash when presented with digital alternatives.

The Bank of Ghana recently briefed the Payments Canada Summit on its CBDC work, the eCedi.

Safaricom has increased both the account and daily transaction limits on its M-Pesa mobile money service from KSh 300,000 to KSh 500,000, approximately $3,477. The limit for an individual transaction remains at Ksh 150,000.

An undergraduate study in Nigeria has been published by the Munich Personal RePEc Archive which considers what happens to money, monetary policy and financial assets when cash demand falls.

Asia Cash Cycle Seminar (ICCOS) The seminar takes place 11-13 September in Bangkok, co-hosted by the Bank of Thailand. It starts with a summit for central banks.

The Bank of Canada (BOC) has issued a staff discussion paper examining whether or how CBDCs can deliver on the promise of financial inclusion in a cashless society.

Laos has trialled a digital currency, the Digital Lao Kip, working with Soramitsu, a Japanese fintech company.

McKinsey have issued a white paper on what is happening with AI and Generative Pre-trained Transformer (GPT).

The role of Currency Issue Director is great preparation for high office in a central bank. Ask Andrew Bailey, Governor of the Bank of England, or Michelle Bullock, soon to be Governor of the Reserve Bank of Australia, both of whom have managed currency in their banks. What makes it such good preparation?

The Financial Services and Markets Act 2023 is now law in the UK. The Act requires the UK’s Financial Conduct Authority (FCA) to ensure the maintenance of reasonable provision of cash deposit and withdrawal services for personal and business current accounts held at banks.

The Banque de France issued a working paper in October 2022 that dealt with a number of fundamental questions about cash, questions that are particularly important in a less cash scenario. The paper addressed not just why people hold cash but why they hold different denominations. As the economy changes, what happens to cash holdings?

Austria is looking at including the right to use cash in its constitution. A task force is looking at putting the right to pay with physical money and to guarantee access to ATMs.

CBDCs started to become visible in published papers and discussions around 2016. No doubt there was much material before then but the acceleration of interest and activity has taken CBDCs from a niche to main stream media discussions.

The Dutch National Bank recognises that while digital payments are a preferred payment solution for some, they are a challenge for others. A missing element in understanding this is the extent to which cash is important and which groups cannot do without cash.

The European Commission (EC) has published proposals on the legal tender status of cash and a possible future European Central Bank Digital Currency.

Planning for the third euro series is underway. The Theme Advisory Group has issued a shortlist of six themes following an internal voting procedure.

The European Money and Finance Forum has recently published a useful paper on big data and machine learning in central banks.

The Bank for International Settlements (BIS) has surveyed 86 central banks and found over half are conducting concrete experiments or piloting CBDCs.

Let’s talk about Canada’s Prime Minister Justin Trudeau, the Chinese Communist Party (CCP), the UK’s Brexit campaign leader Nigel Farage and cash. Cash, of course, being a key part of the payment system driving economic activity around the world.

At the Currency Conference in May 54 members of the International Association of Currency Affairs (IACA) met to discuss how to build a resilient cash infrastructure, a highly topical subject.

Australia’s Commonwealth Bank is to scrap over-the-counter cash withdrawals at new cashless bank branches. Cash will still be available at ATMs.

Artificial Intelligence (AI), Machine Learning, ‘big data’ and ChatGPT have now reached the public consciousness in a big way, hence headlines such as ‘Central Bank of Ireland blocks ChatGPT for staff as financial services firms grapple with AI’ and ‘China’s Central Bank Warns Against ChatGPT ‘Data Leaks’.

The Currency Conference took part in Mexico City in May 2023. Two sessions were particularly relevant, an overview of cash today and work to ensure cash is resilient.

The Bank for International Settlements (BIS) has published its second guide to creating a Central Bank Digital Currency (CBDC). This edition focuses on a security and resilience framework to guide central banks through the critical task of creating a safe CBDC.

China’s digital currency, the e-CNY, is the world’s largest, longest running and most ambitious Central Bank Digital Currency pilot. Its scale and ambition are huge, as shown by the Governor of the People’s Bank of China (PBOC) who, speaking at a Monetary Authority of Singapore conference, revealed that the e-CNY has had over $250 billion in transactions in its first 18 months since launch.

The media rejoices in either claiming the metaverse is dead in the water or that it is booming. Wherever it falls, payments are made in the metaverse, it is a global marketplace and there is the opportunity to do things differently.

In 2019 the Central Bank of Kenya demonetised the KES 1,000 banknote. It has issued a comprehensive report on its experience that offers interesting lessons for any central bank planning such an exercise.

The Federalist Society in the US has published a useful, and brief, summary of where key economies are in their CBDC thinking.

The Bank for International Settlements has published ‘A Handbook for Offline Payments with Central Bank Digital Currencies’.

Account-to-account payments (A2A) have been talked about for some time. There is some evidence that they are beginning to fulfil their promise. The latest 2023 Worldpay Global Payments Report from FIS says there are now 64 real-time payment schemes in operation providing high-speed payment rails for A2A payments.

Following industry wide consultation at the end of 2022, the Australian Federal Government has published its Strategic Plan for the future of Australia’s payments system setting out a number of policy objectives and priorities. The plan outlines the government’s commitment to ensuring that the country’s payments system is safe, affordable, trusted and will remain readily accessible.

The Future of Cash conference takes place in Istanbul 6-8 November, with the early booking delegate fee ending on 15 September.

Many countries are facing falling cash demand, which is causing problems in the cash cycle. This report, by Paul Blond of the Blond Group LLP, shows the compromises having to be made in Australia as a result.

The Dutch Finance Minister has proposed legislation to ensure the provision of cash facilities, at least to a basic level. The legislation builds on the results of a PwC study on the future structure of the system for banknote and coin deposits and withdrawals for consumers and retailers.

With the publication of the IMF paper ‘Measurement and Use of Cash by Half the World’s Population’, and the Cash Essentials rebuttal, a new paper about demand forecasting by the Banca d’Italia is timely and adds to the discussion.

Visa carried out a Consumer Payment Attitudes study in Singapore in October 2022. It found that nearly 90% of Singaporean consumers regard cashless payments and mobile banking to be the most eco-friendly option.

Bruegel, a Brussels based European think tank, has published a paper considering the value added by CBDC in the context of the euro area.

In the last few years, the number of papers written about CDDCs has exploded as the world’s central banks rush to think about and investigate them. The Bank of Canada has carried out a literature review focusing in particular on the potential impact of introducing a CBDC on private banks, which it has published as a staff discussion paper.

The latest Federal Reserve Payments Study shows an annual 6.2% increase in the number of card payments between 2018 and 2021. Behind that figure there are fluctuations, a fall in 2020 being offset by a rise in 2021, for example.

The 2023 Future of Cash Conference takes place 6-8 November in Istanbul and will bring together all stakeholders of the cash community – central banks, financial institutions, retailers, cash management companies, technology providers and suppliers – to discuss new strategies to design the cash cycle of the future.

The European Payments Initiative (EPI) was established to build a unified pan-European payment system to rival Mastercard and Visa. Consumers and merchants would be able to use a card, digital wallet and make person-to-person payments. The idea was backed by the European Central Bank (ECB) and 31 banks joined the EPI.

The IMF has issued a working paper ‘Stacking up the Benefits Lessons from India’s Digital Journey.’ In it, the IMF describes the achievement of India in creating a Digital Public Infrastructure (DPI) that delivers significant benefits.

The European Central Bank (ECB) has issued a progress report on the digital euro. The ECB’s thinking is in development, with a final decision to be made at a future date. A notable element in the report is the work on how the digital euro may be made available and harmonised with existing payment systems.

The Silk Road Cash & Payments conference, which took place in Almaty, Kazakhstan at the end of March, included a session looking at the future of cash, with presentations from the Bank of Israel, the Bundesbank and European Savings and Retail Banking Group.

The Bank of Korea is planning to introduce a QR code-based ATM deposit and withdrawal service this year. When this service is in place, users will be able to make deposits and cash withdrawals and this function will be possible irrespective of whether the ATM belongs to the customer's bank or not.

The Bank for International Settlements Committee on Payments and Market Infrastructure consists of 14 Advanced Economy and 13 Emerging Market Economy countries. It collects extensive data on their cash and electronic payments and uses these to draw conclusions about payment trends.

The UN-facilitated Cash Working Group for Sudan, temporarily based in Nairobi, Kenya, is considering its options. While there will be a short-term requirement for food-aid, the bulk of the response is likely to involve cash transfers. But in what form?

Yuserisal Mohd Noor, Head of Automated Cash Centre at Bank Negara Malaysia presented at the recent Silk Road Cash & Payments conference on the Bank's project to fully automate its cash centre.

Sir Jon Cunliffe, Deputy Director Financial Stability at the Bank of England, has spoken about innovation in payments and money, focusing on the impact and opportunities offered by tokenisation, including the future of cash.

The Riksbank has issued its phase 3 report on its work to understand how an e-krona might work. This phase investigated how the Riksbank could collaborate with existing payment service providers to allow access to the e-krona based on the existing collaborative approaches.

Although a snapshot of cash related crimes taken from media reports, they are a reminder of the risks of cash related crime used to justify less cash. In January Cash & Payment News™ reported that for the first time ever no bank branch in Denmark had experienced an attack, since they no longer handle cash.

Anikó Bódi-Schubert and Ágnes Illés Belházy have provided a short summary of the content of the new Magyar Nemzeti Bank (MNB) regulation on the processing and distribution of banknotes, its main motives and its expected impact on domestic cash payments.

Latvijas Bank reported that in February 2023 non-cash payments made up 67% of transactions with cash responsible for the rest. The average number of payments per person per week was at a historical high of 14.3, up from 12.8 a year earlier.

Three leading French banks have announced a plan to share ATM services, similar to what has happened in the Netherlands and Belgium.

Germany’s community bank group has argued that Central Bank Digital Currencies (CBDCs) should only be brought into circulation by commercial banks who should be ‘appropriately compensated’ for it.

On 5th April, FedCash® Services, Pakistan Security Printing Corporation, G+D and Reconnaissance will talk about different ways of disposing of unfit cotton banknotes in a free online seminar.

Cash Essentials has issued a report, ‘The Role of Cash in the Future Monetary Landscape’. Based on a Futures Literacy Lab hosted by Cash Essentials in collaboration with the UNESCO Chair for the Future of Finance at Ecole des Ponts Business School, in September 2022. The paper lays out how a Futures Literacy Lab works and seeks to understand the future of money.

The International Currency Association (ICA), representing the global currency sector, has published a Cash Policy White Paper, available on its website www.currencyassociation.org, which is summarised here. It wants policy makers to recognise that the benefits of cash to society may be lost without practical steps to protect the supply and acceptance of cash in society and promote its further development.

Something strange is happening in the US. According to PYMNTS research, fewer US restaurants are accepting digital wallets as a form of payment. Between September 2021 and April 2022, the number fell from 81% to 73%. At the same time consumer confidence in wallets has been rising.

While data about digital payments is usually good, measuring cash is problematic. Understanding cash usage is important for regulatory authorities. IMF Working Paper WP/23/62 explores the measurement of cash based on ATM cash withdrawals value as an alternative to the traditional cash in circulation as a proportion of GDP method.

The 2023 World Banknote Summit (WBS) took place in Antwerp and was structured around three key areas – the performance of cash in a crisis, the sustainability of cash and the future outlook of cash.

The cryptocurrency exchange platform Coinbase has published a series of tweets giving its perspective on stablecoins, providing a good summary and insight about them.

Danmarks Nationalbank held a conference on 9 March in Copenhagen that looked at crypto assets and Distributed Ledger Technology (DLT), and then Central Bank Digital Currencies (CBDCs).

Although a snap shot of cash related crimes taken from media reports, they are a reminder of the risks of cash related crime used to justify less cash.

The International Mint Industry Association (IMIA) issued a brief making the case for cash and for freedom of choice at its launch this month.

The Bank of Canada (BOC) has published two survey reports in the last few months. The first was the Methods of Payment survey 2021 and the second the Merchant Acceptance Survey Pilot Study.

Currency Research will be holding the inaugural Silk Road Cash & Payments Conference in Almaty from 27-29 March.

The International Mint Industry Association (IMIA) was founded last year and officially launched this month at the World Money Fair in Berlin, with a specific focus on research and advocacy for coins as part of the cash, and hence payments, ecosystem. IMIA President Gerhard Starsich (GS) and Managing Director Martina Horakova (MH) spoke to sister publication Coin & Mint News™ about the foundation of the new association, the role of coins in the cash cycle, and how the IMIA plans to make the case for their importance, and indeed that of cash overall.

The Dutch National Bank has carried out research into how people are coping with adapting to digital payments. Nearly 20% of those over 18 years old, 2.6 million, struggle with digital payments.

Commercial banks are profit-seeking entities. Cost reduction to maximise profits and automation are core to achieving that. Bank branches and ATMs are expensive, hence the drive to close so many of them and, in the process, the ability to deposit and issue cash goes too. Merchants and the public are pushed towards going cashless, or at the very least, less-cash.

In a recent speech to the European Union Committee on Economic and Monetary Affairs, Fabio Panetta, European Central Bank board member, said the ECB is looking at a new digital euro app with a basic payment function and creating a standardised way of connecting end users to intermediaries.

As noted in the December issue of Cash & Payment News™, the European Union has announced a set of new directives to limit the amount of cash and crypto transactions in a move, it says, that will crack down on money laundering and terrorist financing.

Innovation in the UK’s banking sector continues, with Barclays Bank announcing the introduction of semi-permanent banking pods. 10 will be established by summer 2023 following a successful trial.

The International Mint Industry Association has published a position paper (2023/01) urging the European Commission to give legal certainty on the implications of the legal tender status of euro banknotes and coins in terms of mandatory acceptance and to enshrine it in secondary law.

At the end of 2011, the Netherlands had 2,654 bank branches. At the end of 2021 this had fallen to 726, and not all of those provided over the counter cash services. At the same time, more than 4% of retailers now inform customers that they don’t accept cash.

Registration for the second Optical and Digital Document Security™ conference is now open, with a programme that demonstrates the importance of this event in bringing together people involved in developing digital systems for identity and financial transactions with the more traditional security document community.

Sveriges Riksbank has issued its 2022 Payments Report into the retail payments market. The report underlines the wide-ranging activities of the Riksbank to support the needs of all sectors of society when it comes to payment.

The Fraunhofer Institute has been working on a project known as BASIC since January 2020, which aims to strengthen the resilience of the cash supply infrastructure in the event of an emergency or crisis.

Italy is looking at possible compensatory measures to help retailers pay card fees following its change of heart on reducing cash limits.

The five countries who spend the most using mobile payments at the point of sale are China, America, the UK, France and Japan.

An important CBDC topic is its impact on a central bank’s ability to implement monetary policy. A technical paper by the BIS examines the possible impact of paying interest on CBDCs, or enabling CBDCs to compete with other payment methods in terms of convenience.

SICPA has entered into a strategic partnership with the INX Digital Company with the aim of helping governments develop innovative and sovereign Central Bank Digital Currency ecosystems.

The UK’s Information Commissioner’s Office has written a report which, amongst other things, considers the privacy implications of Decentralised Finance (DeFi).

At the beginning of September, the Central Bank of Nigeria (CBN) revised cash withdrawal limits as part of its campaign to increase the use of electronic payments. Feedback on the limits has led it to update its original Circular.

The Bank for International Settlements (BIS) has created an open access database of data relating to retail payment for 95 countries from September 2019 to June 2022.

The Dutch National Bank has issued a working paper considering the implications of moving to non-cash payment methods, if any.

Cash Works… But It Could Work Even Better! This is the title of the Koenig & Bauer Banknote Solutions white paper on cash innovation & sustainability.

The European Central Bank (ECB) has reported on its Study on the Payment Attitudes of Consumers in the Euro Area (SPACE) 2022.

Koenig and Bauer Banknote Solutions (KBBNS) has signed a new partnership with the virtual ATM company SONECT as part of its strategy to help reinvent the way we move, access and manage cash in society.

The 2023 World Banknote Summit (WBS) takes place 20-22 February in Antwerp.

There will be very few organisations that can eliminate carbon emissions completely, and most organisations are going to take a number of years to get anywhere close.