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Panel discussionThe Future of Cash:
a 10 year perspective
Thierry LebeauxSecretary General
ATM & Cash Innovation14 June 2017, London
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The prophecy
There will be a time – I don’t know when, I can’t give you a date – when physical money is just going to cease to exist.
Robert Reich, Economist;; former US Secretary of Labor
John Cryan, Deutsche BankDavos, January 2016
In 10 years, cash may probably no
longer exist. It is justawfully inefficient.
The Economist, 15 Feb 2007
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• 3 years after all cash was removed, transaction fees increased 15% annually
• Climate change/natural disasters: long power cuts create payment uncertainty
• Hackers broke into payment and mobile systems;; billions of private funds are missing
2050: the nightmare scenario
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The Conundrum
Access to cash is controlled by a stakeholder that has:
1. No interest in promoting cash
2. A strong interest in promoting its own competing products
War on cash = elimination of a competitor
(fair enough – unless you have control on the access to cash…)
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Norway Central Bank’s presentation,
Paris, 11 April 2016
We could not have said it better !
Source: slides 6, 13 and 14 of Mr Leif Veggum, Norges Bank, Future of Cash Conference Paris 11-12 April 2016
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What if no alternative to electronic payments?
• How do you control your funds during uncertainty?
• How can a society function without payments during a disaster?
• What happens to transaction costs if there are only a few companies controlling all business?
• How do private people make payments between them ?
• How do you ensure financial inclusion of the less well-off in society
X
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Cash and Crime
Crime Cash
No Cash No Crime ?
Corruption ?
Source http://www.stiftung-marktwirtschaft.de/uploads/tx_ttproducts/datasheet/Argument_136_Bargeld_2016_01.pdf
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Cash and Crime
Crime Cash
No Cash No Crime ?
Organised crime ?
Countries with upper cash paymentlimits are also those with the
highest estimated share of black economy
Source: Stiftung Markt Wirtschaft
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Cash and Crime
Crime Cash
No Cash No Crime ?
Terrorism ?Most attacks are in countries with upper cash paymentlimits
Source: Europol 2016 “TE-SAT 2016”.
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1. Certainty of acceptance Legal Tender
2. Immediate settlement Fastest settlement possible
3. No infrastructure requirement Key for P2P
4. Ease of useFor anyone
5. Ease of monitoringControls indebtedness
6. Privacy & AnonymityNot just for crooks!
7. State-underpinningConfidence and very low risk
8. Financial inclusionNo alternative to the poors and vulnerables
Cash strong resilience
One single reason:
There is no perfect substitute to cash
9. Feel-good factor
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The reality: cash is still king
Source: G4S 2016 Cash report: www.g4scashreport.com
• Not a cash-less society…55% of all payments are in cash
80% of all payments under €20 are in cash(source: ECB)
• Not even a less-cash society Value of Euro Cash in circulation: €1,100 bn(That’s 5 times the amount of January 2002…)
Since the 2008 financial crisis, increasing value of ATM withdrawals : +15% (source G4S)
Cash payments still increasing in numbers, but at lesser pace than the rate of growth of all payments.
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• Diversity of payment instruments kept costs low and competitive
• Investments in cash technologies led to a sharp increase of efficiency of cash
• Peaceful coexistence between cash and other means of payment has boosted consumers confidence
2050: the likely scenario
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Re-think the cash business
Cash is not free to users:• Cash pays for itself (seigniorage)• Cash is available primarily through ATMs: requires a bank
account and a card, both subject to fees
No one should feel forced to offer cash services • but no one should act against the availability of cash to
consumers• There are alternative circuits to get cash to users
A substantial reduction of the ‘cost of cash’ can be achievedthrough:
• Standardisation• Clarity on the role of NCBs• Shorter cycles, local recirculation• Stronger cooperation between banks and CMCs
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A 10 years perspective…
“Forecasting is difficult –
particularly when it concerns the future”
J. Chirac
A word of caution: