A central bank s views on the latest developments in the use of cash

Transcription

1 Henk Esselink European Central Bank Head of Section Issue and Circulation A central bank s views on the latest developments in the use of cash ATM & Payments Innovation Summit Madrid, October, 2018

2 Rubric Overview ECB-UNSTRICTED The banknote circulation as an indication of cash use Cash withdrawals and as indication processing of as cash an indication use of cash use Survey results on the use of cash Concluding remarks 6 2

3 1. Rubric Overview of the euro banknote circulation 1,400 EUR billion annual growth rate (%) 14% 4.5% Annual growth rate circulation value end-sept 1,200 12% 1, % 8% 21.7 billion Banknotes in circulation 600 6% % 2% 0% 1,195 billion Total value of banknotes in circulation 3

4 1. Rubric Overview of the banknote circulation Circulation development per denomination value 4

5 Rubric 1. Overview of the euro banknote circulation Growth rates per denomination (percentage) % 15% 10% 5% 0% -5% -10% -15% -20% % 15% 10% 5% 0% -5% -10% -15% -20% 5

6 1. Overview of the euro banknote circulation Cash/GDP ratio world-wide (percentage) Sources: Central banks; OECD; RBA; Statistics Sweden The Future of Cash (2016) Davies, Doyle, Fisher and Nightingale 6

7 1. Overview of the euro banknote circulation ECB-RESTRICTED Demand outside the euro area 30% Domestic transactions 25% Domestic store of value 45% But: Definition of store of value è If you put aside cash and only pay with it after 1, 3 or 12 months is that transaction cash or store of value? Source: Trends and developments in the use of euro cash over the past ten years, ECB, Economic Bulletin, September

8 1. Overview of the euro banknote circulation ECB-RESTRICTED Development commercial bank s vault cash (in EUR mln) 80,000 Vault cash 75,000 70,000 65,000 60,000 55,000 50,000 45,000 40, Source: Trends and developments in the use of euro cash over the past ten years, ECB, Economic Bulletin, September

9 Rubric Overview ECB-UNSTRICTED The banknote circulation as an indication of cash use Cash withdrawals as and indication processing of cash an use indication of cash use Survey results on the use of cash Concluding remarks 6 Environmental impact of cash payments 9

10 2. Rubric Cash withdrawals as indication of cash use Cash withdrawals by source - values of withdrawals (euro area percentages) Cash back at a shop 2% Family, friends or colleagues 9% Cash reserves e.g. cash jar 8% Other source 7% Doesn t know/not stated 5% Bank counter 8% A cash dispenser (ATM) 61% Sources: ECB, DNB. (EA-18) 10

11 Rubric 2. Cash withdrawals and processing as indication of cash use Value of card payments and cash withdrawals at ATMs (euro area, in EUR mln) 1,800 1,600 1,400 1,200 1, card payments cash withdrawals % Average annual growth rate withdrawals last 10 years (cards 5.8%) 6 countries withdrawals > card payments (DE, GR, IT, AT, LT, LV) 4 countries See a decline in cash withdrawals over > 3 years (BE, GR, NL, FI) 11

12 2. Rubric Cash withdrawals as indication of cash use Germany (EUR bn) Italy (EUR bn) card payments ATM cash withdrawals card payments ATM cash withdrawals Spain (EUR bn) card payments ATM cash withdrawals France (EUR bn) card payments ATM cash withdrawals

13 2. Rubric Cash withdrawals and processing as an indication of cash use Trends in banknote processing for recirculation (billion notes, euro area) NCBs 3rd parties +2.5% +4.5% +0.9% % 49% 52% 53% Share banks/cits 30 53% 51% 48% 47% Share NCBs

14 Rubric Overview ECB-UNSTRICTED The banknote circulation as an indication of cash use Cash withdrawals and as indication processing of as cash an indication use of cash use Survey results on the use of cash Concluding remarks 6 Environmental impact of cash payments 14

15 3. Survey results on the use of cash Market share of payment instruments at POS in 2016 Number Value Cards 19.1% Other 2.1% Other 7.2% Cards 39% Cash 53.8% Cash 78.8% Based on the 2017 survey in Germany, the share of cash in 2016 would have been 76% Source: ECB, BBK, DNB. (EA-19) 15

16 3. Survey results on the use of cash Share of cash transactions at the POS in 2016 number of transactions value of transactions 11 countries > 75% 5 countries 50-75% 2 countries < 50% 1 country > 75% 11 countries 50-75% 7 countries < 50% 16

17 3. Survey results on the use of cash Consumers preferred payment instrument (%) cash card or other non-cash payment methods you have no clear preference between cash or non-cash payment methods don't know 100% 90% 80% 70% 60% 50% 40% 12% 10% 15% 20% 21% 17% 18% 15% 16% 16% 30% 31% 37% 47% 33% 39% 40% 44% 45% 47% 50% 17% 25% 43% 16% 15% 13% 14% 52% 53% 63% 65% 26% 25% 16% 17% 54% 57% 66% 66% 30% 20% 59% 48% 48% 46% 44% 43% 42% 40% 39% 37% 33% 32% 32% 32% 10% 0% CY AT MT IE SI GR ES LT IT LV DE euro area 24% 21% 20% 19% 18% 17% PT SK NL LU FI EE BE FR Source: ECB, BBK, DNB. (EA-19) 17

18 3. Survey results on the use of cash Use of cash over the years (percentage of cash over all POS transactions) Netherlands Germany euro area Sweden Switzerland UK Denmark 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: ECB, Danmarks Nationalbank, Deutsche Bundesbank, De Nederlandsche Bank, UK Finance (UK Payment Markets Summary 2018), Swiss National Bank and Sveriges Riksbank. 18

19 Rubric Overview ECB-UNSTRICTED Overview of the euro banknote circulation Cash withdrawals and as indication processing of as cash an indication use of cash use Results of a survey on the use of cash Concluding remarks 6 19

20 4. Rubric Concluding remarks Euro banknote circulation shows a robust growth, even of the transaction denominations ( 5, 10 and 20) On average ATM withdrawals and banknotes processed are increasing, albeit very moderately Use of cash still strong, and on average 1/3 of euro area citizens prefer to pay with cash over other means of payment but large differences between countries; in terms of value of transactions cash may be marginalised in some countries in 2030 action is needed to ensure availability and acceptance of cash for those who want to use it Nevertheless Reports on the imminent death of cash are greatly exaggerated 20

21 Rubric Thank you for your attention!