According to a 2018 ECB survey, 75% of credit institutions rated their cash services to customers as important or very important, 20% were neutral, and only 5% rated cash services as unimportant. It is estimated that around 75% of all euro banknotes withdrawn by customers are withdrawn via self-service banking, while deposits of banknotes are evenly split between attended (over-the-counter, OTC) services and unattended (automated) services.
The EPC report stresses that banks are pursuing the automation of cash services with a particular focus on deposit as traditional cash-out ATMs are increasingly replaced by cash-recirculating devices. However, the European ATM network is also downsizing, under the combined pressures of cost-cutting, banking consolidation but also increasing interoperability of different networks.
According to ECB data, 25,000 ATMs have been closed in the EU between 2014 and 2019. The chart below illustrates for each country, the year when the number of ATMs peaked and the decline in the number of ATMs since the peak year. Finland tops the league and saw its ATM estate shrink by 56% since 2000. Belgium has seen the fastest decline, with 45% of the ATMs closing since 2015.
The recent ECB Study on the payment attitudes of consumers in the euro area (SPACE) shows that in 2019, cash remains by far the most widely used payment instrument as 73% of the volume and 41% of the value Point-of-Sale (POS) and person-to-person payments was carried out using cash. down from respectively 79% and 54% in 2016. The EPC stresses that “consumers still use cash, and that they like to have choice in the way to pay”. It also emphasizes that a large segment of the population that does not have a choice at all. The European Commission, estimate that about 30 million adults in the EU do not have a bank account. Finally, cash plays and important contingency role and provides payment continuity when digital payment systems fail.
The EPC concludes that the cash cycle is becoming increasingly complex and highlights a negative correlation between declining cash usage and increasing costs. As the use of cash for payments diminishes, then the unit costs tend to rise.
The EPC calls for a dialogue with all cash cycle stakeholders – including retailers and post offices – who could play a more important role in the distribution of cash. In particular, the EPC sees cashback as an efficient alternative solution for the distribution of cash.