News in Brief

Coin Drought Returns in the US

The Federal Reserve Bank of Kansas City has gone public encouraging people to use coins and to return them into the cash cycle. After the coin hiatus last year, which saw the formation of the Coin Taskforce and limits on the issue of coins to retailers and institutions, the situation had eased with the limits lifted and normal service resuming.

However, in May those limits had to be reintroduced. In March the new US administration sent out a further round of stimulus payments. The Federal Reserve believes these meant low-income families no longer needed to use coins to pay bills. In addition, higher consumer spending increased transactional coin demand. This, and the threat of the delta variant of COVID-19 which may keep shoppers at home, seems to have created the new shortages.

As before, this is not an issue of insufficient coins, but of coins not circulating. The US Mint Director, David Ryder, said, ‘we cannot manufacture our way out of the problem.’ The US Mint is running at capacity, producing about 20 billion coins since January 2021.

Steve Kenneally, Senior Vice President at the American Bankers Association and a member of the Federal Reserve’s Taskforce, made the pithy comment, ‘tit began with the virus, and it will end with the virus’.

NCR Takeover of Cardtronics Approved

The final obstacle to NCR’s takeover of Cardtronics has now been removed with receipt of the approval of the UK’s Competition and Markets Authority.

NCR has bought Cardtronics as part of its strategy to create an end-to-end service strategy.

Cardtronics runs over 285,000 ATMs across ten countries in North America, Europe, Asia-Pacific, and Africa. NCR provides point-of-sale software to the retail and hospitality sectors and multi-vendor ATM software. It writes software, makes hardware and provides services to run ATMs from back-office to the front-end for customers.

RBI to Charge Banks if ATMs are Out of Notes

From 1 October 2021 the Reserve Bank of India (RBI) is to fine banks who allow their ATMs to run out of banknotes for more than ten hours. The fine has been set at ₹10,000 (€115) per ATM.

Banks are required to submit system generated reports on ATM availability due to running out of notes each month. The scheme includes ‘white label ATM operators’.

Cash Issuance Ahead of Withdrawals In Estonia

In Estonia in the second quarter of 2021 more banknotes and coins were issued than withdrawn; €255 million worth of notes were issued and €144.5 million withdrawn and €4.2 million coins issued and €1.4 million returned. However, in value terms, the Bank of Estonia issued 20.5% fewer banknotes in the second quarter of 2021 than a year earlier.

The €50 note was the most demanded, accounting for 77% of notes issued, with the one and two cent coins the most issued coins.

Cash is widely available in Estonia, with 98.4% of the population within 10 km of one of the 700 ATMs (207 of which can accept deposits), 29 bank branches and 660 shops where cashback from tills is possible.

Cash usage is starting to recover compared with last year. The number of ATM withdrawals was up 7.5% and cash deposits were up 24.2% at €488 million.

79 counterfeit banknotes, mostly €20 and €50 notes, and 12 counterfeit coins were registered in the quarter.

Glory Invests in OneBanks

Japanese cash technology group Glory is to become a cornerstone investor in OneBanks, a UK start-up which has developed a low-cost pop-up kiosk which could replace bank branches in towns and communities where conventional bank branches have all but disappeared.

The investment comes as UK banks extend ongoing trials of shared banking hubs in the face of impending legislation which will give the Financial Conduct Authority the power to review future branch closures.

OneBanks is promising to provide bank-agnostic in-branch services – such as cash withdrawals, deposits, payments, and face-to-face support – for people and SMEs in communities abandoned by traditional bricks and mortar bank outlets.

On completion of the transaction, Glory will become the lead external investor with a significant minority of the enlarged capital.

OneBanks intends to begin full UK nationwide roll-out, expanding to 15 locations by the end of 2022 and 150 by 2025.

2020/21 Coin Issue Low in the UK

The Royal Mint issued 437 million coins in circulation in the UK in 2020/21, down from 588 million the year before. It issued so few £1 coins they don’t show up in the statistics. This reduction is a dramatic fall from 2014/15, when 2.4 billion were issued.

Ironically the pandemic, whilst reducing coin usage as in-person transactions fell, increased the need for 1p and 2p coins, denominations needed for settling payments. As in the US and other

countries, a lack of economic activity stalled the cash cycle, creating an artificial shortage. As recently as last year the Royal Mint had proposed stopping minting 2p coins for a decade after receiving back very high volumes of these during the changeover to the new £1 coin.

In contrast, in the US 7.3 billion coins were struck in the first half of 2021, making it the quickest six-month start since the first half of 2017. If the current production pace stretched through to December, the annual US mintage for 2021 would top 14.7 billion coins, about the same number as 2020 when 14.77 billion coins were struck.