News in Brief

The Future of Money and Payments

The US Department of the Treasury has issued a report, ‘The Future of Money and Payments’ ¹. The report was requested by the President in the context of fast-moving changes to the US system of money and payments.

While the existing system has real strengths, its legacy systems can be slow, hard to adapt and are difficult for some people and businesses to access. The report makes four recommendations: 

• Advance work on a possible US CBDC, in case one is determined to be in the national interest.

• Encourage use of instant payment systems to support a more competitive, efficient, and inclusive US payment landscape.

• Establish a federal framework for payments regulation to protect users and the financial system, while supporting responsible innovations in payments.

• Prioritize efforts to improve cross-border payments, both to enhance payment system efficiency and protect national security.

BSP Promotes More Coin Recirculation

The Bangko Sentral ng Pilipinas (BSP) is working with large retail establishments to introduce automated coin deposit machines (CoDMs) in and around Manila to promote the re-circulation of coins.

The idea is that people will pay in coins in convenient-to-use CoDMs and receive shopping vouchers or rewards card points in return. Alternatively, the value can be credited directly to their bank accounts or electronic wallets.

Like many countries, people in the Philippines tend to hoard coins and BSP is keen to have them recirculate. In June 2022 BSP data shows 342 coins per person, up from 50 in 2005.

NCR to Split its Business

NCR Corporation has announced that it will split into two publicly traded companies.

One will focus on its ATM business, the other on its digital online commerce business. NCR wants to build its software business in the retail, hospitality and digital banking sectors.

The ATM company, which is cash- generative, will look to deliver ‘ATMs as a Service’. The announcement of the split says it will look to build on its leadership in self-service banking and ATM networks, exploiting new ATM transaction types.

NCR had previously been in talks with potential buyers, among them the private equity firm Veritas Capital, and the share price had surged as a result. The news that an acquisition was off the table, and the company would split into two instead, was not received well by the market, with the share price falling sharply.

Banking Hubs Gaining Momentum

The Post Office in the UK has set up ‘banking hubs’ in branches as a trial. The idea is that commercial banks that have closed their high street branches can maintain a physical presence on a limited basis at these hubs, sharing time each week with other banks.

The initial trial was in two locations, with a further ten added. This has just been increased with a further 13 announced. With 50 branches a month closing this year, the hubs are urgently needed.

Glory Launches New Cash Retail Recycling Solutions

Glory Global Solutions has launched the next generation of retail cash recycling solutions, known as CASHINFINITY™. Glory’s claim is that they are connecting processes that were previously done separately and that this brings efficiencies, enhanced security, staff productivity and savings.

Glory’s CI-10X recycler is designed to be used at the Point of Sale (POS), working with digital payment POS solutions. The recycler automatically gives customers their required change.

In the US market a back-office solution, the CI-500X, automates the start and end of day cash processes. It prepares floats for tills, carries out store reconciliation and prepares for CIT cash collections.

Finally, the CI-SEVEREX cash management software organises front and back-office cash handling providing real-time updates on equipment and cash inventory.

Glory has increased the number of currencies supported, including Swiss and Polish currencies.

Thoughts on a Future Canadian Digital Dollar

In the run up to the Bundesbank event on 9 November celebrating 20 years of the euro, the Bank of Canada has published a paper that looks back at cash trends before, during and since the COVID-19 pandemic.

This is well trodden ground, but the paper goes on to explore two scenarios for issuing a Canadian Digital Dollar. First is a situation where Canada has become a cashless society. Second is where the use of an alternative digital currency has become widespread. However unlikely the scenarios are, the Bank is monitoring and analysing such developments.

In this context, the paper considers a possible Canadian CBDC and what might trigger one being issued. The need to maintain cash as an efficient and accessible payment tool and store of value is discussed, alongside what Canada is doing to achieve that.

Greenwashing: a ‘Systemic Problem’

Recent research by Censuswide has lessons for the cash industry. The work was focused on banking executives in the UK but its findings apply more broadly.

While UK banking executives universally say that sustainability is integral to their business strategy, only 59% of UK banks actually measure their environmental impact as part of sustainability targets. Like most businesses, there are aspects of what banks do that are not sustainable.

Nearly half of banks, 49%, choose to offset as a priority rather than addressing the root cause of what is generating their carbon emissions. This figure is up compared with the 2021 Sustainable Banking Report.

Those surveyed list the lack of universally recognised regulation and enforcement (31%), cultural legacies that need to be shifted, budget implications and limited knowledge of the market (25%) as barriers to change.

The conclusion was that businesses need to work harder at reducing their impacts and to have a robust measurement and reporting framework in place to track progress.

1 - https://home.treasury.gov/system/files/136/Future-of-Money-and-Payments.pdf