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CashTech: Taking Cash Forward

Categories : CashTech, Innovation contributes to the efficiency of cash
February 9, 2021
Published in : Cash cycle efficiency, CashTech, Innovation
A new CashEssentials report shows how technology and innovation can create a sustainable, future-proof cash cycle. The paper provides an overview of where we are in terms of CashTech innovation, and aims to encourage its continuation, by supporting the work of innovators, start-ups and scale-ups.
Guillaume Lepecq

Chair, CashEssentials

CashTech is the encounter of cash and technology. It brings together innovative companies who leverage software and modern communications technology to improve cash services: access to cash; acceptance of cash; and the efficiency of the cash cycle for all stakeholders.

CashTech provides a compelling addition to the traditional cash infrastructure

Comprised mostly of dynamic young start-ups, such as Sonect (Switzerland), SoCash (Singapore); viafintech (Germany) and Shrap (United Kingdom), CashTech realised early that cash services must integrate seamlessly into the lives of users to stay relevant, as cash retains its importance in an increasingly digital world.

As banks reduce their cash infrastructure (branches, ATMs and cash centres) in most advanced economies, CashTech has moved quickly into the open lane. Increasingly, it appears as a compelling addition and complement to traditional channels for the distribution and circulation of cash.

CashTech combines innovation and inclusion

Yet CashTech start-ups are intent on bringing banks further into the CashTech tent – together with retailers and consumers – to keep cash viable amid height- ened global awareness of its enduring role, in terms of inclusion, fairness, resil- ience and the protection of privacy.

Cash continues to hold dominant market positions. Though the amount of cash in circulation is growing faster than GDP in most countries, investor and media interest has focused more on those seeking to displace cash, than innovators working to facilitate its use.

This White Paper seeks to redress the balance. During the coronavirus pandemic, central banks have recorded exceptional spikes in cash demand, as people in- crease their precautionary holdings. This has confirmed the prevalent role of cash as a store of value in a crisis (Heinonen). Citizens on tenterhooks, in the face of a pandemic, have turned en masse to the “rainy day” safe haven of cash and the sense of stability it provides in uncertain times.

But cash-users are holding more and spending less. In the era of the smartphone, the pandemic has changed the way we shop, dramatically reducing consumption as large sections of the economy have shut down. The pandemic has also boosted online shopping and contactless payments, in part due to mislaid fears about cash as a vector of viral transmission.

Long central to its appeal, the tactile nature of cash – helping us budget, spend  more wisely and educate our children about the value of money – must not be allowed to become a performance handicap for physical money. As with any financial product, the capacity for cash to change will be integral to its continuing success.

Cash possesses unique attributes unmatched by digital payment alternatives.

Cash is universal; anonymous; trusted and resilient; a mainstream payment and monetary instrument that is also a bedrock for the unbanked, elderly and vulnerable.

Retail payments have experienced unprecedented innovation and diversification during the last decades, driven by evolving retail models, technological innovation and deregulation. Yet despite the increased use of electronic payments around the world, there is scant evidence that a shift away from cash has occured. Quite the opposite. Never has there been so much cash in circulation.

Innovation, driven by more progressive market incumbents as well as new entrants, has contributed substantially to making cash more accessible and sustainable for business. It has also served to make the cash cycle shorter, more efficient, and bring cash closer to the people for whom access to cash is a fundamental right.

This is the technology we call, CashTech,making cash perfectly suited to the digital world.

 

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