A recent paper, ‘COVID Cash*’, by Kenneth Rogoff and Jessica Scazzero considers the implications for advanced economies in the long-term trend of value being stored in cash, a trend accelerated by, and highly visible due to, the pandemic. They make two arguments.

Alper Sayin, Director Cash Planning and Operations at Garanti BBVA, has summarised the key cash and payment trends facing Turkey in 2021. Cash is increasing but cost control remains high on the agenda, with new cash processing tools being used and an ATM pooling initiative being closely monitored.

RBR’s most recent study, ‘ATM Software 2021’, looks at the latest ATM developments across the world.

Wales, with a population 3.15 million, along with England 56.3 million, Scotland 5.46 million and Northern Ireland 1.89 million make up UK’s total population of 66.8 million. Although all countries in the Union are governed by the UK government based in Westminster in London, Wales along with Scotland and Northern Ireland each has a devolved Parliament with limited powers.

The Bank of Canada conducted studies into cash usage in April and July 2020*. This March it updated its staff discussion paper 2021-23 reflecting on these surveys and what they tell us about cash as pandemic containment measures lift.

Payments in their many guises are essential to the way we all live our lives, to buy bread and milk, to heat or homes and to do many other things. Around the world the majority of people take payments for granted and are able to choose the payment option that suits their needs for the particular transaction. However, many people don’t have this choice and have to rely on a single payment method, and this is very often cash.

The Bank of International Settlements (BIS) received 65 responses to its latest Central Bank Digital Currency (CBDC) survey of which 21 were from Advanced Economies (AE) and 44 from Emerging Market/Developing Economies (EMDE). The results are published in BIS Papers 114, authored by Codruta Boar and Andreas Wehrli.

If Central Bank Digital Currencies (CBDCs) do not solve a real problem, then they will fail. In a recent paper by Peter Bofinger and Thomas Haas, Professor for Monetary Policy and International Economics and Research Associate and Chair for Monetary Policy and International Economics respectively at the University of Wurzbürg, they throw doubt on whether central banks have found a compelling need for CBDCs.

Relative to its population, India has few ATMs – 22 per 100,000 people, according to the World Bank, compared with 81 in China. It also has one of the lowest ratios of ATM cash withdrawals relative to cash in circulation, according to a June 2019 RBI report, 'Benchmarking India's Payment Systems'.

Mastercard has announced that the interchange fee on products bought online in the EU by British card holders will increase from 0.3% to 1.5%. Debit card fees will increase from 0.2% to 1.15%. This fee increase is justified because now the UK is no longer part of the EU, fees will be charged at the ‘inter-regional’ fee level rather than ‘intra-regional’ fee level.

January’s edition of Cash & Payment News™ covered NCR’s bid for Cardtronics. NCR – which describes itself as ‘a technology provider for the financial, retail and hospitality industries’ – has now announced that it has entered into a definitive acquisition agreement to buy the company, paying $39 per share, valuing Cardtronics at $2.5 billion. NCR justifies this in its statement as accelerating its shift to ‘NCR-as-a-Service’ strategy, moving its mix of revenues across its business more to software, services and recurring revenue.

The CBDC Conference, 3-5 October 2021, will go ahead in Frankfurt, although the organiser is remaining flexible to put it online if need be. Registration comes with a ‘COVID-19 guarantee’ so that people can be confident about committing to the event.

The last year has accelerated a number of payment trends, with the cash ‘paradox’ to the fore (cash in circulation up, cash transactions down). The Future of Cash conference laid out and explained the growing pressure on cash but also gave good data, examples and food for thought about opportunities for the future.

In October 2020 the Federal Reserve’s national Cash Product Office (CPO), with the Federal Reserve Bank of Atlanta and Federal Reserve Bank of Boston, conducted the annual Diary of Consumer Payment Choice survey.

In IMF Working Paper 2020 255, entitled ‘Dirty Money: Does the Risk of Infectious Disease Lower Demand for Cash?’, its author Serhan Cevik – a senior economist with the IMF – looked at data from 133 countries between 1995 and 2017 to understand how people react to a rise in infectious diseases. Against his initial study he then ran a further five subsets of data to test his findings. After controlling for macroeconomic, financial and technological factors, the data was clear that a rise in infectious disease reduces the demand for physical cash.

The European Central Bank (ECB) study, 'Foreign Demand for Euro Banknotes', set out to identify the demand drivers for euro banknotes and to estimate the share of euro banknotes in circulation outside of the euro area.

Digital currency covers more than Central Bank Digital Currencies (CBDCs), it extends to all the digital solutions from Bitcoin to Diem. Digital currencies store balances in anonymous electronic addresses.

Central Bank Digital Currencies (CBDCs) are much talked about. The IMF has published a detailed paper – ‘Legal Aspects of Central Bank Digital Currency: Central Bank and Monetary Law Considerations’ – which explains the legal position of CBDCs and has investigated the position of 171 IMF members to see which are currently able to issue a CBDC. The paper will help central banks think through this element of their CBDC preparations.

The Dutch National Bank (DNB) studied how an external shock, the COVID-19 pandemic, affected payments in the Netherlands, using an extensive payment diary that ran from January 2018 to October 2020.

On 26 January the European Court of Justice (ECJ) gave its judgement on the Hessischer Rundfunk case.