×

Warning

JUser: :_load: Unable to load user with ID: 42
SECURITY PRINTERS 2016 - A CENTRAL BANKER'S THOUGHTS ON PAYMENTS
Banco de España welcomes Security Printers to Seville

(edited for the web)


At Intergraf’s 2016 Security Printers, International Conference & Exhibition last autumn, Javier Alonso, Deputy Governor of Banco de España (BdE), graciously welcomed participants to Seville.

It is the custom for the host country’s central bank to do so, but Mr Alonso also used this opportunity to share his thoughts on the phenomenon of money and, more specifically, its use as a ‘means of payment’.

A lot of attention has been directed towards new, high-tech electronic payment methods and other financial technology in recent years, he said, thus throwing into question the future of cash. Without a doubt, some initiatives will become reality. But it will take time and will require a change in the mentality of users.

Besides cash, cards are the most frequently used form of payment by number of transactions in Spain: 2.9 billion transactions between credit and debit cards for a total amount of €125 billion in 2015, with an average of € 43 per transaction.

Direct debit accounted for 1.1 billion transactions, for a total amount of € 306 billion and a transaction average of € 263. Credit transfers, including all transfers between bank customers but excluding interbank operations, reached 461 million transactions for € 5.8 trillion.

While BdE has accurate figures for these transactions, there are none for cash and the amounts involved in Spain. A survey it conducted nonetheless revealed that 70 per cent of citizens rely on cash as their usual means of payment, albeit for amounts lower than those involving cards.

Mr Alonso thinks there is probably still room for growth in the use of cards. New, innovative modes of payments keep appearing that could influence their use and that of cash. He gave the example of an instant payment initiative of the Spanish financial system that started to operate the week the conference was held: Bizum.

Based on mobile phones, Bizum allows transfers to be made between bank accounts in less than 10 seconds. Systems such as these can change most forms of payments, yet depend on public acceptance and familiarity. We will have to wait and see.

Mr Alonso however believes that, in spite of new payment methods, cash will remain an important part of the payment industry for many years to come. BdE recently backed this conviction with action: it entered the business of printing banknotes.

Following a change in legislation, FNMT (Fabrica Nacional de Moneda e Timbre) created IMBISA (Imprentade Billetes SA), in which BdE subsequently bought an 80 per cent stake. FNMT transferred its banknote production unit to IMBISA and the new company is now the in-house printing works of BdE, in accordance with the Eurosystem Production and Procurement Guideline.

Mr Alonso added that if cash continues to be used, central banks, banks and other stakeholders will have to find appropriate ways to optimise it. Best practices and expertise must be shared to make it as efficient as possible and improve the overall functioning of the cash cycle. The fight against counterfeiters also needs to continue to safeguard the trust in banknotes.

 

Read and download the article published in Infosecura 71