News in Brief

ECJ Allows Limits on Paying in Cash

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

The Bundesverwaltungsgericht (Federal Administrative Court in Germany) had sought guidance about whether Hessischer Rundfunk could refuse payment of its radio and television licence fees in euro banknotes. A higher-ranking provision in German federal law said that euro banknotes are to be unrestricted legal tender, but was this compatible with the exclusive competence of the European Union in the area of monetary policy for member states whose currency is the euro?

Cash & Payment News™ will publish a detailed summary of the ECJ’s findings, but, in summary, ‘a euro area member state can oblige its administration to accept payments in cash, but can also limit that payment option on public interest grounds. Such a limitation may in particular be justified where payment in cash is likely to involve the administration in unreasonable expense because of the very high number of persons liable to pay’ is very high’.

The ECJ concluded by saying it is for the Bundersvertaltungsgericht to decide whether the limitation on cash payments by Hessischer Rundfunk ‘is proportionate to the objective of actually recovering the radio and television licence fee, in particular in the light of the fact that the lawful alternative means of payment may not be readily accessible to everyone liable to pay it.’ 

Contactless ATMs Increase Fast in Switzerland

SIX Banking Services has reported a major shift to contactless cash withdrawals in Switzerland, part of a worldwide trend which started before the pandemic. It says the number of ATMs offering contactless cash withdrawals grew by 26% around the world in 2019.

In Switzerland it says over half of ATMs are now contactless enabled, a third with QR code readers and 20% with Near Field Communication readers. SIX reports banks that have introduced QR code-based machines seeing a 269% increase in transactions in 2020. QR codes to allow cash withdrawals are either generated using digital wallets or via mobile banking apps.

Prosegur Signs Up to Climate Pledge

Prosegur, including its cash business Prosegur Cash, is the first security group to sign up to ‘The Climate Pledge’, a commitment to achieve net zero carbon by 2040. The Climate Pledge initiative was created by Amazon and Global Optimism in 2019 and 53 companies are now signed up to it.

Prosegur will measure and report on its greenhouse emissions and implement initiatives to improve efficiency, increase its renewable energy use, and reduce its use of polluting materials. For any remaining emissions the company will use offsets to achieve the net zero carbon target. The offsets will be quantifiable, real, permanent and socially beneficial.

Prosegur regards signing up as evidence of its commitment to sustainability, a cornerstone of the company's development strategy. It has already started work on decarbonisation, having hybridised and electrified its fleet of operational and commercial vehicles. Prosegur Cash operates the world’s first 100% electric armoured lorries, and is limiting its use of plastics and increasing its recycling of plastics and oils.

In addition, Prosegur has put the United Nations (UN) Sustainable Development Goals into its corporate strategy, signed up to the UN Global Compact and is part of the FTSE4Good index.

More Bank Branch Closures

Commerzbank, which employs nearly 50,000 people worldwide, wants to reduce costs to stay profitable. It will do this by cutting one out of every three jobs in its home market of Germany and its 790 branch network will be reduced to 450.

The bank will invest €1.7 billion over the next four years to digitise and automate business processes in order to reduce costs by €1.4 billion, or around 20%, by 2024. The bank says it is putting ‘profitability before growth’.

In September 2019 the bank decided to cut 2,300 jobs and close 200 branches in the wake of an abandoned merger with Deutsche Bank.

In the Netherlands, Rabobank will follow a similar route to Commerzbank. It has announced it will reduce its traditional branch network, reducing its workforce by 5,000 people over the next five years, 12.5% of the total. It will invest in digital technology to improve its operational and financial performance. Rabobank’s net profits for 2020 were down 50%.

Bahamian Sand Dollar Extends Reach at Home and Abroad

When it was first launched in October last year, the Bahamian Sand Dollar (Central Bank Digital Currency) could only be accessed by users who were registered and by using a digital app from Island Pay. The Sand Dollar could only be spent at selected merchants.

Island Pay are now offering a prepaid card that allows people to covert their Sand Dollar to traditional Bahamian dollars for use anywhere that Mastercard cards are accepted.

SWIFT sets up JV with the Chinese CBDC Research Institute

SWIFT, the leading provider of secure financial messaging services around the world, has signed a joint venture (JV) with the Chinese Central Bank Digital Currency (CBDC) Research Institute, along with China’s Cross-border Interbank Payment System and the Payment & Clearing Association of China. The JV is called the Finance Gateway Information Services Co.

SWIFT said in a statement to Reuters that ‘its services will be limited in scope and entirely focused on maintaining compliance with applicable regulations in China’, perhaps seeking to dispel thoughts that the JV is intended, in due course, to take China’s Digital Electronic Payment System global.

SICPA Joins Digital Monetary Institute

SICPA, better known for being a maker of inks for the high security printing market, has signed a partnership agreement with the OMFIF Digital Monetary Institute (DMI). OMFIF, a global central banking think tank, created its DMI in May 2020 to explore the challenges and opportunities of digital finance, including Central Bank Digital Currencies (CBDC). SICPA says it has been carrying out applied research into the requirements of CBDCs for several years with the goal of ensuring ‘an enduring role for money as a trusted public good'.

Other members of the DMI include Bundesdruckerei, Giesecke + Devrient Currency Technology, Mastercard, PayPal, Six Digital Exchange and SWIFT.