News in Brief

Cash and Mobile Money Use Not Exclusive in Singapore

Singapore’s Lee Kuan Yew School of Public Policy, working with UOB, a bank, has carried out a national survey on digital inclusion and resilience.

The survey of 2,000 people found that 88% of respondents use mobile banking at least a few times a month but 75% also use ATMs several times each month. 25% visit their bank branch a number of times each month.

The survey asked people how open they were to using mobile banking and it found a high level of willingness to try it, even amongst high cash users. Trust was the key which would move people from intention to action. Perhaps surprisingly, the survey found that older adults were not the most susceptible to being scammed. Under 25s were 10% more susceptible than those over 65 years old.

Finns should Hold Cash as a Back-up

The Chief Cashier at the Bank of Finland has urged citizens to hold cash at home in case there is an intentional disruption of Finland’s payment systems.

Only 7% of Finns use cash when making a purchase.

Brinks Buys NoteMachine

Brinks is buying NoteMachine, which manages 9,000 ATMs in the UK, as part of its strategy to grow its ATM managed services business. The acquisition of NoteMachine expands the number of ATMs managed by Brinks to about 130,000 around the world.

NoteMachine was bought for approximately $179 million, five times adjusted EBITDA. NoteMachine has a strong UK presence in ATM outsourcing with monitoring and dispatch centres and software technology infrastructure adding to Brink’s European business base.

Cash Acceptance Falls in Australia

The Australian Payments System Board has issued its review of 2021 payments. Cash acceptance by retailers with physical shops fell from 99% in February 2020 to 94% in June 2022. Cash usage has recovered from its low of 23% of in-person transactions being in cash in 2020 to 27% in 2021.

It will be interesting to see whether that recovery continues or whether the decline experienced before the pandemic now continues.

Businesses in Europe Like Cash

The European Central Bank (ECB) has carried out a survey of cash use by businesses in the euro area. The survey was based on over 10,000 interviews and the analysis concentrated on businesses with most interaction with consumers – retailers, restaurants and cafes, hotels, entertainment and recreation sectors.

Even countries that have already moved to using less-cash, such as the Netherlands, have 90% acceptance levels of cash. The survey looked at how the businesses like to be paid, the cost of cash, how they deposit and access cash and their plans for the future.

Cashback. It is interesting to note that while there is much talk about people being able to get cash in shops through cashback or cash-in-shops, in reality few businesses offer it, and most are not planning to. It is unclear whether this is because businesses have little information about it or don’t think the public will want the service. The fees involved were only given by 10% of respondents for why they don’t offer it.

Payment preference. The survey found that although customers prefer to pay using a card, businesses generally think cash is better in terms of total costs, transaction speed and reliability. 25% of businesses prefer payment in cash. This fell to 4% in Finland, but this is an unusually low result. Perhaps unsurprisingly, therefore, few businesses intend to stop accepting cash in the near future (5%). Most businesses have to deposit cash but only a quarter have to make cash withdrawals.

Interestingly the results were consistent across the euro area. Although Malta had the lowest cash acceptance rate, 87%, this is not very different from Germany’s 98%. Restaurants and cafes had the highest acceptance level, 99%, while 79% of arts, recreation and entertainment businesses accepted cash.

Perhaps sightly surprisingly acceptance of credit cards was higher than debit cards, 87% compared with 80%. Contactless card acceptance was 82%, which was probably a considerably lower number pre- pandemic.

When asked for key criteria guiding acceptance for different payment means, the four that scored highest were security (94%), reliability (92%), overall costs and ease of handling (90% each). While payment crime for ‘person not present’ transactions is extremely high, this is less of a problem at the point-of-sale. As a result, debit and credit cards were regarded as more secure than cash.

Reasons for perhaps stopping using case were that it is time consuming (32%) and not used by sufficient clients (31%). In the longer term this may well turn out to be the highest risk to cash. Interestingly the risk of COVID infection was only 12%.

Access to cash. Cash depositing and withdrawals shows how important bank branches are today to businesses and, again, the reduction in the number of bank branches is a risk for cash. 49% of businesses deposit cash and 64% withdraw it over-the-counter. Cash-in machines are most used, 53%. Cash- in-transit (CIT) is rarely used, 17% of companies for depositing and 20% for withdrawing cash.

Automation. Only 23% of companies have smart cash tills and 63% do not automate their cash operations. 80% of those who are not currently automated have no plans to do so.

Barclays Bank Offers Cashback Without Purchase in Shops

In the UK Barclays Bank is offering businesses with a Barclaycard Payments terminal the ability to offer any of their customers who use a Visa or Mastercard debit card the ability to withdraw up to £100 per day in cash, without needing to make a purchase. Businesses will pay Barclays a transaction fee. Customers will be able to ask for any amount even if coins are required.

The Financial Services Act 2021 made this possible and this is part of the Access to Cash Action Group’s campaign for cash. Barclays is one of the driving forces behind the Access to Cash Action Group, and it is also rolling out Banking Hubs, shared spaces from which a selection of the major banks can operate.

The UK’s Financial Conduct Authority (FCA) has recently extended guidance to banks about carrying out impact assessments before closing branches to include partial closures. Banks must make alternative provisions for customers, including the creation of banking hubs, and these need to be in place before the branch closure, or ATM conversion, takes place.