Henk Esselink A central bank’s views on the latest ... · A central bank’s views on the latest...
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A central bank’s views on the latest developments in the use of cash
ATM & Payments Innovation SummitMadrid, 17 – 19 October, 2018
Henk EsselinkEuropean Central BankHead of SectionIssue and Circulation
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Cash withdrawals as indication of cash use
Overview
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The banknote circulation as an indication of cash use
Concluding remarks
Survey results on the use of cash
Cash withdrawals and processing as an indication of cash use
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1. Overview of the euro banknote circulation
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0%
2%
4%
6%
8%
10%
12%
14%
0
200
400
600
800
1,000
1,200
1,400
20082009
20102011
20122013
20142015
20162017
2018
EUR billion
annual growth rate (%)
4.5%Annual growth rate circulation value end-Sept
21.7 billionBanknotes in circulation
€ 1,195 billionTotal value of € banknotes in circulation
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Circulation development per denomination
value
1. Overview of the banknote circulation
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Growth rates per denomination (percentage)
1. Overview of the euro banknote circulation
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
2008 2010 2012 2014 2016 2018
€500 €200 €100 €50 €20 + €10 + €5
1. Overview of the euro banknote circulation
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Cash/GDP ratio world-wide (percentage)
Sources: Central banks; OECD; RBA; Statistics SwedenThe Future of Cash (2016) Davies, Doyle, Fisher and Nightingalehttps://www.rba.gov.au/publications/bulletin/2016/dec/pdf/rba-bulletin-2016-12-the-future-of-cash.pdf
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ECB-RESTRICTED1. Overview of the euro banknote circulation
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?
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Source: Trends and developments in the use of euro cash over the past ten years, ECB, Economic Bulletin, September 2018
Demand outside the euro area
30%
Domestic transactions
25%
Domestic store of value
45%
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ECB-RESTRICTED1. Overview of the euro banknote circulation ECB-UNRESTRICTED
Source: Trends and developments in the use of euro cash over the past ten years, ECB, Economic Bulletin, September 2018
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Vault cash
Development commercial bank’s vault cash (in EUR mln)
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Cash withdrawals as indication of cash use
Overview
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Environmental impact of cash payments 6
The banknote circulation as an indication of cash use
Concluding remarks
Survey results on the use of cash
Cash withdrawals and processing as an indication of cash use
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Cash withdrawals by source - values of withdrawals (euro area percentages)
Sources: ECB, DNB. (EA-18)
Bank counter8%
A cash dispenser
(ATM)61%
Cash back at a
shop 2%
Cash reserves e.g.
cash jar8%
Family, friends or
colleagues9%
Other source
7%
Doesn’t know/Not
stated5%
2. Cash withdrawals as indication of cash use
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Value of card payments and cash withdrawals at ATMs (euro area, in EUR mln)
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2. Cash withdrawals and processing as indication of cash use ECB-UNRESTRICTED
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
card paymentscash withdrawals
2.6%Average annual growth rate withdrawals last 10 years(cards 5.8%)
6 countrieswithdrawals > card payments(DE, GR, IT, AT, LT, LV)
4 countriesSee a decline in cash withdrawals over > 3 years (BE, GR, NL, FI)
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•Germany (EUR bn) •Italy (EUR bn)
2. Cash withdrawals as indication of cash use
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0
100
200
300
400
500
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
card payments ATM cash withdrawals
0
50
100
150
200
250
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
card payments ATM cash withdrawals
•Spain (EUR bn) •France (EUR bn)
0
50
100
150
200
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
card payments ATM cash withdrawals
0
100
200
300
400
500
600
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
card payments ATM cash withdrawals
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Trends in banknote processing for recirculation (billion notes, euro area)
2. Cash withdrawals and processing as an indication of cash use
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33.6 32.9 32.3 32.3
29.7 32.0 35.6 36.2
0
10
20
30
40
50
60
70
80
2014 2015 2016 2017
NCBs3rd parties
+2.5%+4.5% +0.9%
47%
53%
49%
51%
52%
48%
53%
47%
Share banks/CITS
Share NCBs
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Cash withdrawals as indication of cash use
Overview
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Environmental impact of cash payments 6
The banknote circulation as an indication of cash use
Concluding remarks
Survey results on the use of cash
Cash withdrawals and processing as an indication of cash use
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3. Survey results on the use of cash
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Market share of payment instruments at POS in 2016
Source: ECB, BBK, DNB. (EA-19)
Cash78.8%
Cards19.1%
Other2.1%
Number Value
Cash53.8%
Cards39%
Other7.2%
Based on the 2017 survey in Germany, the share of cash in 2016 would have been 76%
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number of transactions value of transactions
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11 countries > 75%5 countries 50-75%2 countries < 50%
1 country > 75%11 countries 50-75%7 countries < 50%
Share of cash transactions at the POS in 2016
3. Survey results on the use of cash
17Source: ECB, BBK, DNB. (EA-19)
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59%48% 48% 46% 44% 43% 42% 40% 39% 37% 33% 32% 32% 32%
24% 21% 20% 19% 18% 17%
30%
31% 37%33%
47%39% 40% 44% 45% 47%
17%
43%52% 53%
63% 65%54% 57%
66% 66%
12%20% 15%
21%10%
17% 18% 15% 16% 16%
50%
25%16% 15% 13% 14%
26% 25%16% 17%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
CY AT MT IE SI GR ES LT IT LV DE euroarea
PT SK NL LU FI EE BE FR
cashcard or other non-cash payment methodsyou have no clear preference between cash or non-cash payment methodsdon't know
Consumers’ preferred payment instrument (%)
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Use of cash over the years (percentage of cash over all POS transactions)
3. Survey results on the use of cash
Source: ECB, Danmarks Nationalbank, Deutsche Bundesbank, De Nederlandsche Bank, UK Finance (UK Payment Markets Summary 2018), Swiss National Bank and Sveriges Riksbank.
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
NetherlandsGermanyeuro areaSweden
SwitzerlandUKDenmark
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Cash withdrawals as indication of cash use
Overview
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Overview of the euro banknote circulation
Concluding remarks
Results of a survey on the use of cash
Cash withdrawals and processing as an indication of cash use
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• 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”
4. Concluding remarks ECB-UNRESTRICTED
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Thank you for your attention!