Reviewing the year shows that the arguments for and examples of the value of cash have piled up this year and come into sharper relief. At the same time, our progress in turning that into a new cash era remains limited. Concurrently, the landscape for new digital payments has got more complicated and big issues remain to be resolved. So we end the year with many positives and much to do.
‘Established’ forms of digital payment have flourished this year. Every month we have reported on the wider adoption of QR codes, often for cross-border payments, and the growth and adoption of faster payment schemes and infrastructure, with the best known being PIX and UPI. Mobile money schemes, such as M-PESA, have also been spreading fast, particularly across Africa. African fintechs, which always start with cash services, have had a highly successful year.
However, we have also reported on the rise and persistence of digital and cyber crime around the world. The scale and prevalence is material and organisations and authorities are struggling to contain the losses, with the criminals becoming increasingly bold, innovative and widespread. The Monetary Authority of Singapore has taken a different approach for paying for these losses, with consumers paying a bigger share than in other jurisdictions. Cash looks positively safe in comparison.
We have also reported on some disruptors, for example JPMorgan introducing charges to fintechs for access to consumer data, which risks severely disrupting their business models.
Research has also confirmed that the mobile wallet generations are now feeling the same pain of paying as their parents felt when paying with cash.
New forms of digital payment have also had an interesting year. Retail central bank digital currencies have fallen out of fashion, replaced by stablecoins. That said, the European Central Bank (ECB) has pushed on, securing initial authority from the European Parliament to move forward with a digital euro. The Bank of England is also continuing its exploration into a digital pound. China has gone quiet on its retail central bank digital currency (CBDC) pilot.
In contrast, wholesale CBDCs are thriving, driven by the need for more efficient, lower cost and faster cross-border payments.
We have reported on seemingly countless initiatives, trials and projects around the world.
Stablecoins have been the big theme of the year with the US GENIUS Act in July playing a major role driving interest, activity and reporting of stablecoins. The IMF in particular, has written a constant stream of papers throughout the year on every aspect of introducing and using stablecoins, but they are only one of a large number of writers.
Again, stablecoins have not had a trouble-free year. For example:
We started the year with a report from Enryo, a consultancy, which pointed out that we may have reached ‘peak digital’ in many economies, given that the data shows digital adoption and usage slowing massively. An ECB report in August showed that the 18-27 year old age group used cash more than the average. That changes the story of payments.
A constant theme throughout the year has been seeing payment as a continuum from cash to digital. The concept of a ‘war on cash’ is now outdated since there seems to be an almost universal acceptance that cash is needed by a large, embedded proportion of each In amongst the overall conversation about the future of cash, some specific trends have emerged.
Cash business model: the challenges discussed have been making/keeping the business model for cash viable. The cash crisis in Australia that followed the merger of its two cash in transit companies into Armaguard has highlighted the risks that less-cash brings. Interestingly, when the Bank of Canada reworked its cost of cash model to recognise that many people get cash from ATMs as part of visits that they were making for other reasons, the cost of cash fell 15-25%.
Resilience in a crisis: equally, the floods and a later power outage in May in Spain that disrupted cash services, a number of major IT outages, natural disasters such as California’s wild fires in January, Myanmar’s earthquake in March, and the Caribbean’s Hurricane Melissa in October, and the consequence of widespread wars/conflicts around the world have also made cash resilience a major theme.
We have written a constant stream of stories about actions taken by countries such as Sweden and Poland, on their actions to ensure cash is available in times of crises. For Sweden, safety and accessibility have replaced efficiency as their priority.
Access to and accessibility of cash: we have also written a constant stream of stories about actions taken on access and accessibility, for example by Austria, Finland, the Netherlands, Switzerland, Thailand and South Africa. Action on the acceptance of cash has also featured widely.
The role of ATMs is changing as they become more capable, particularly where countries have digital identity schemes. Some commercial banks, such as Fifth Third in the US and FiNDI in India, see cash services as a strategic channel to reach customers.
The UK’s access to cash plan, with its shared banking cash hubs, and the utility model for ATMs used in countries such as the Netherlands and Belgium, are just two examples of many different models to sustain access to cash. Equally we have covered stories about cash being delivered by post, and access and deposit services at local drop off and service centres (eg.
PayPoint in the UK). CashTech comes in many forms!
Across Cash & Payment News™ and editorials in its sister publication Currency News™ this year, we have argued that while there is something almost human about cash, it will only endure if it is relevant, secure and available.
While we encourage central banks, politicians and all cash stakeholders, actively and proactively, to support the use of cash, there is the need to rethink cash. How do we make an analogue product work in a digital age? We have written about the opportunities – in the back, middle and front office of the business of supplying and circulating cash – of using data to do things differently.
We have even argued for revolution and not evolution in the broader thinking of what a physical token of exchange looks like in a digital age. While we can learn from how other analogue products have avoided going the way of the cheque, to avoid its fate we need to reinvent this classic product and counter all of the inertia we inevitably face.
In terms of promoting cash, as we recently mentioned, perhaps our cash promotional efforts could borrow from the playbook of American Eagle and their Sydney Sweeney campaign, which used provocative images and suggestive copy to drive home their message (buy more of our jeans)!
We end the year on a positive note. Today, cash production volumes are at a high, and suppliers are working flat out. That suggests cash demand is healthy. In addition, some countries are approaching their digital peak and the result is a distinct change of mood: cash and digital, not cash versus digital.
What a wonderful time actively to promote cash, to make changes to sustain cash, including re-working the cash cycle business model, and to re-think a future cash product. Onwards to 2026!
