News in Brief

UK Bank Branch Innovation Accelerates

Innovation in the UK’s banking sector continues, with Barclays Bank announcing the introduction of semi-permanent banking pods. These will be placed where consumers go rather than in traditional high street locations, retail parks, railway stations etc. 10 will be established by summer 2023 following a successful trial.

Having closed 178 branches in 2022, Barclays has also been leading the way opening new alternative format in-person access in places such as libraries and town halls. It operates 200 of these and aims to open another 70, some in areas currently without a Barclays presence. It is a leading member of the Cash Action Group.

Meanwhile TSB, part of the Lloyds Banking group, is also investing in open banking pods, taking a similar approach to Barclays. TSB will initially open three pods in towns where it is closing its branches but they will be based in shopping centres and open every day. The pods are supplied by NoteMachine, which is better known for its ATMs, and which is part of Brinks.

The pods are semi-permanent structures. They have check-in areas, dedicated customer meeting spaces and cash withdrawal services. Deposit facilities will be added later this year. The underlying technology is NoteMachine’s BankHive multi-functional device.

TSB is also carrying out a pilot using the OneBanx ‘kiosk’ solution and has a presence in the shared Cash Access UK Banking Hub pilot. It has introduced 43 pop-up services since April 2021. These run for a day a week in community locations such as libraries or town halls, staffed by TSB employees. In addition, it is investing in video banking. All with the goal of maintaining service levels for its customers.

Switzerland May Vote on Cash Guarantee

A people’s initiative which seeks to guarantee the existence of banknotes has passed the 100,000 threshold needed for the initiative to be regarded as valid. The Mouvement libertaire Suisse published its initiative on 5 February, explaining that ‘cash is freedom’ and that any move to abolish the Swiss franc should have to be approved by the people and the cantons.

In order for a people’s initiative to be valid and to go to an nationwide vote, it needs 100,000 signature within 18 months. 157,000 signatures have been collected and 111,000 validated so far.

The Mouvement libertaire Suisse sees electronic transactions as a risk to freedom because it makes surveillance easier.

Take Away Lessons from European Consumer Payments Study

Ulrich Bindseil, General of Market Infrastructure and Payments, and Doris Schneeberger, Director Banknotes, at the European Central Bank (ECB) have written a blog about recent research on how people make payments.

The piece starts by providing the evidence that cash remains the most frequently used method of payment, 59%, but makes the comment ‘it seems that consumption and payment behaviours learned during the pandemic outlasted the restrictions that caused them.’ 

They highlight that 55% of euro area consumers prefer paying without using cash, which seems to be driven by ease of payment. Despite that, 60% value having the choice of paying in cash, or not, depending on the situation or purchase.

The ECB’s conclusion from all this is to continue to support the availability of different payment instruments, which is made more complicated by the increasing diversity of options.

One response to that is to work on the potential issuance of a digital euro. Alongside this is the ECB’s support of instant payments with a pan-European reach and European governance.

Stable, reliable euro money is key, whatever its form.

Low Levels of Euro Counterfeiting

2022 saw the second lowest level of counterfeits as a proportion of total banknotes in circulation in the history of the euro, 2021 being the lowest year. Counterfeit data is presented as the number detected per million genuine banknotes in circulation. In 2021 the number was 12, in 2022 it rose to 13, 376,000 in total. This figure has dropped steadily since 2015 and peaked in 2009 at 64.

The percentage increase, 8.4%, is attributed to the recovery of economic activity and cash usage post pandemic. 96.6% of counterfeits were found in the euro area, 2.7% in non-euro European Union member states, and 0.7% elsewhere. The €20 and €50 were most counterfeited.

Nigeria Rows Back on Currency Swap

Nigerian President Muhammadu Buhari has directed the Central Bank of Nigeria to reissue old 200 naira banknotes, withdrawn just days earlier, due to growing concerns that the controversial, and many say botched, introduction of new money could disrupt the upcoming general election.

Violent protests have erupted in recent weeks as millions of people struggled to get their hands on new versions of the 200, 500 and 1,000 naira notes that were demonetised on 10 February, despite a Supreme Court ruling two days previously that the planned currency swap should be suspended.

Now, Nigeria’s Independent National Electoral Commission (INEC) has reportedly warned that the inability of banks to distribute enough of the new cash could make it difficult to pay temporary staff and security guards needed to operate thousands of polling stations for presidential and parliamentary elections on 25 February.

The redesigned currency was unveiled in November last year with the aim of reining in counterfeiting and the hoarding of large sums of money outside the banking system (some 80% of notes are held outside banks).

However, the new notes have been slow to reach the public, particularly in rural areas, with many banks and ATMs continuing to dispense the old notes. In scenes reminiscent of the chaos unleashed in India when it tried to swap its two biggest banknotes in 2016, many Nigerians have been spending hours in long lines at cashpoints in a desperate bid to get enough cash to meet their daily expenses.

The shortages have led to frayed tempers and hardship, particularly those who work in the cash-based informal economy and for citizens who live in rural areas. Protests are spreading across the country and bank branches have been damaged.