In 2023 we continued to cover cash, payments and Central Bank Digital Currency (CBDC). This article provides a swift summary of the year that was.

An International Monetary Fund paper uses data from Uganda to understand whether digital payment innovations, particularly mobile money payments, will increase financial inclusion and if it will reduce people’s preference for cash.

The ECB is looking to sign five agreements worth about €1.1 billion for a four year pilot of a Digital Euro starting early 2025.

Leon Schumacher, from Digital Ekho, gave the opening talk at the AI & CB (Artificial Intelligence and Central Bank) online conference in December. For those new to AI, it provided a fast overview of what AI is and some of the issues connected to it.

However you want to cut it, NCR Atleos (Atleos) is big in all thing’s ATMs. Data as of 23 June 2023, used in its September 2023 investor day, showed that it had over 800,000 installed ATMs.

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.

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.

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.

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.

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

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.

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’.

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.

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.

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.

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.

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