2020 Vision: News in Brief

Did much happen this year? A moment to reflect.

At the start of the year Cash & Payment News (CPN) commented on key trends in the last 10 years:

1.The adoption of new payment technology 

2.The rise of e-commerce

3.The ‘cash paradox’ (rising cash in circulation alongside falling cash transactions)

4.The decline in cheques

5.Vanishing coins

6.Changing cash distribution models

7.The emergence of digital currencies, but no mention of Central Bank Digital Currencies (CBDCs).

What a great summary. This year has seen 1 and 2 come into their own, with cash payments retreating as retailers react to the pandemic. The pandemic has, of course, also seen coin circulation severely disrupted and cheque usage fall even further.

The cash paradox has been revealed in country after country and is again covered in this edition (see page 5).

Cash distribution has been tested by the pandemic and found to work, but the impact of less cash is likely to accelerate the need to keep cash costs low.

Finally, CBDCs have been one of the big stories of the year.

Looking back over what has been published, this is the story of 2020.

Editorial themes

Editorial topics emerge during the month and so they are an interesting measure of what is important and trending.

From March until June COVID and its impact led and the tone was tense, culminating with ‘Will cash bounce back?’ in June.

Since then the mood has changed, with the focus moving to the role of cash in financial inclusion, how digitising the cash cycle can make cash competitive, what is the real cost of non-cash payments, how cash has proved to be remarkably resilient and the importance of trust.

It appears that the perspective, even confidence, about the role, importance and future of cash is returning, whilst acknowledging fully that cash is increasingly the junior partner when it comes to payments around the world.

Cash usage

The year’s articles can be categorised around topics and the largest of these are items relating to cash usage, a big topic given the impact of COVID-19.

There were specific articles on 16 countries. Eight stories were gloomy about the prospects for cash with seven positive, and the spacing of these stories reflects the initial impact on cash usage of COVID, followed by more confidence about a recovery.

There were nine articles about the pandemic and reports on eight surveys carried out by central banks and others. In addition, there were five articles considering the demand drivers for cash.

Payment stories

Appropriately, there were exactly the same number of articles about payments as there were about cash usage. 12 countries were discussed, only one of which was European. Mobile payments was the most discussed technology, covered twice as much as apps, QR codes, contactless payments and data stories combined.

The role of government featured heavily, perhaps reflecting both the threat as well as the opportunity that the rapid growth of non-cash payments present. The cost of payments has been extensively covered, with increases in non-cash payment costs starting to appear in the last quarter.

Safeguarding the use of cash

A new theme in 2020 has been the steps being taken by governments to safeguard payment choice.

Although largely in advanced economies looking at less cash, this has included reviews of legislation around the definition of legal tender and being able to pay in cash, the monitoring of payments along with agreements with banks to maintain widespread ATM networks and not to shut bank branches, new rules about cashback and moves to encourage and enable the consolidation of cash cycle infrastructure.

The decline of bank branches has featured throughout the year, and this edition covers this extensively.

Technology

Technology and innovation of all descriptions have featured consistently across the payment types.

CashTech has featured heavily, reflecting the high level of activity to make cash competitive in a COVID world – accessing ATMs and cash using apps and other solutions, the use of self-service equipment by retailers, reinventing the ATM to do more than just issue cash, using smart safes to reduce retailer costs, deploying big data and artificial intelligence to manage cash distribution more efficiently etc.

On the other hand, contactless payments without using cash have also featured heavily. At the start of the year were stories about paying by hand, Amazon shops which know what you have bought and then charge you automatically, and payment using your watch.

This moved on to focus on companies such as Bizum in Spain and PhonePe in India providing mobile payments, the role of QR codes and touchless cash. The business model in Africa of payment service providers moving into more of a banking role and what looks like a changing business model of Google Pay have also been covered.

Digital currencies

At the start of 2020 the Libra Association was the big story in this area alongside a rising tide of CBDC reports. China launched its four city pilots and the level of CBDC activity has increased hugely, so much so that CPN now carries a monthly article on the latest central bank papers on the subject.

As this edition explains, Libra has changed out of all recognition since the start of the year, and not just its name. This is clearly going to be an area of intensive activity in 2021 as well.

Conferences and a final thought

The High Security Printing conference in Lisbon in March was the very last event to be held in the pre-COVID era and, since then, the industry has moved online with many webinars and online conferences. The online world has advantages, it is easy to attend, but it feels harder to extract real value from the content and having those easy, helpful conversations, particularly the unplanned and unexpected ones that add so much value, has proved hard.

CPN has continued to report on the conferences and summarise them in articles but it looks forward for so many reasons to the time when we can meet again in person.

We wish you all a very happy end of 2020 and we look forward enormously to shaking your hand in 2021!