News in Brief
Don’t Refuse Cash Initiative in China
Even China isn’t immune from ‘less cash’. One bank, ICBC, has taken action in Taizhou in Jiangsu to remind people about the requirement for merchants to accept cash in its branches. In addition to promotional materials and videos made available through touch-integrated screens on its ATMs, leaflets have been handed out to waiting customers.
Corporate customers have been asked to sign a ‘Letter of Commitment Not to Refuse to Accept Cash’. It asks them to abide by laws and regulations requiring the acceptance of cash to maintain the order of renminbi cash circulation.
ICBC’s ‘don’t-refuse-cash’ initiative was put online using the bank’s official WeChat account, WeChat groups and websites, along with its Weibo and other multimedia platforms. Weibo is one of China’s largest social media platforms. ICBC staff have gone out of the office, and branch, to visit places where transactions are made – business districts, supermarkets, farmers’ markets etc. – to understand cash needs.
The Yangtze Evening News reported that ICBC staff members explained to people why the act of refusing cash was illegal, as well as offering lower denomination notes and replacing damaged notes. The paper said ICBC had felt the need to show people the range of denominations so that they knew what a ‘Chairman Mao’ looked like.
Cash Demand Strong in 2023 for Nationwide
Nationwide, a UK Building Society, saw cash withdrawals increase by 4% in 2023 compared with the year before. The value withdrawn only increased by 1%.
Nationwide is benefiting by being the ‘last bank in town’ in many places.
Cash, the Natural Learning Catalyst
Financial illiteracy is a problem that contributes to debt levels and, as a new paper from the Academy of Finland points out 1, the rise in household and personal debt levels is a hidden risk to economic stability. Canadian household debt is greater than Canada’s GDP. The digital economy, with its easy payment options, disconnects true value of goods from real needs.
Using coins and banknotes in the classroom helps connect abstract concepts to the real world, and has been used successfully in schools in Australia, Japan, the Netherlands and Northern Ireland. It is particularly good at making sense of digital money and digital accounts and the real world.
In 2023 the international Utrecht conference, organised by Aflatoun International, saw Koenig & Bauer Banknote Solutions (KBBNS), who are a partner of Aflatoun, present a hybrid platform that used banknotes as a natural learning catalyst and utilised existing mobile money agent networks to reach even unschooled teenagers and young adults.
US researchers have found that financial literacy is strongly predictive of having three months of liquid cash savings, and the total cash holdings of the financially literate respondents in Turkey are higher than the other groups. These tendencies have a clear explanation: financially literate people regard cash as a means of storing value, enabling greater freedom, autonomy, and privacy at hand whenever required.
Cash ‘Stuffing’ Reaches South Korea
Are young South Koreans opting to use physical cash rather than make card transactions? In this context ‘young’ means those in their 20s and 30s.
A YouTuber who publishes on budgeting said that paying by cash is inconvenient and that this is a key element in reducing unnecessary expenditure. If you have to give delivery drivers the exact change you end up picking it up yourself. If you have to speak to an actual fast food shop worker to place an order, you end up cooking at home.
The article does not attempt to quantify how widespread all this is, but it has clearly hit the national consciousness at least to some extent.
MAS Promotes a Greener Future
As the Lunar New Year approaches, the Monetary Authority of Singapore (MAS) has issued a press release about using Fit-for- Gifting notes, instead of new notes, for a ‘greener future’. It says about 100 million new notes are issued annually for festive giving before being promptly returned to MAS. The number of notes returned is so great, far in excess of how many notes MAS needs, that the excess ends up being destroyed.
The unwarranted carbon emissions of the notes that are destroyed is comparable to the power required by 430 four bedroom flats. MAS would have to plant 10,000 new trees to offset the emissions.
To get ‘fit for gifting’ notes, customers of three Singaporean banks, DBS, OCBC and UOB, must make an online pre-booked appointment at a bank branch or use selected pop-up and branch ATMs.
Where Relies on Cash the Most?
Based on an analysis of the percentage of internet users, people with a credit card, cash-based transactions, population without a bank account and the number of ATMs per 100,000 people, Merchant Machine 2, an information and comparison website, has created a list of cash-reliant countries based on 2022 data.
The top 10 were Morocco, Egypt, Kenya, Nigeria, Philippines, Bulgaria, Peru, Vietnam, Indonesia and Kazakhstan. What the website does not explain is the algorithm that uses the different criteria to calculate the result.
The most cash-reliant countries in Europe are Bulgaria, Romania, Greece, Ukraine, Portugal, Czech Republic, Hungary, Slovakia, Hungary and Italy.
The least cash-reliant countries were Norway, Finland, New Zealand, Hong Kong, Sweden, Denmark, Switzerland, UK, Singapore and the Netherlands.
Complaints About ATMs in Jamaica
An opposition politician wants the Bank of Jamaica to implement minimum service standards for ATMs. With commercial banks discouraging and reducing bank branch cash services and so encouraging people to use ATMs, it appears that many machines are broken or out of cash.
Investment in TCRs to Continue
RBR published its 2024 Global Branch Transformation study on 21 December 2023. The study is based on in-depth interviews with financial institutions and vendors in 20 countries.
The study found that Glory has a 52.4% market share of the global market for Teller Cash Recyclers (TCR). Although bank branch numbers are falling in many countries, banks are increasingly wanting staff to work with customers rather than dealing with cash. TCRs free staff up.
The study believes that while bank branch numbers will continue to decline, albeit slowly, TCR numbers will grow at a compound annual growth rate of 1.24% through until 2028.
2 - The Countries Most Reliant on Cash In 2022 - Merchant Machine
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