Back to the trenches

[Dave Birch] Peter Jones of Payment Systems Europe, a long time friend of the Digital Money Forum and this year’s chair of the European Perspectives session on 24th April, has written a typically excellent piece for European Card Review called “Europe set to lose its ‘war on cash'”. He says that “Despite its high profile there are indications that the eurozone may lose its ‘War on Cash’. The banking sector appears unable to deliver a strategy and vision… The eurozone remains highly cashcentric and there is evidence that the current cash growth outstrips substitution by cards and electronics”.

Oh dear. So much for the Lisbon agenda and all that.

The central banks are charged with making the European economy more competitive, and replacing cash with electronic transactions is an easy win in this regards. Yet the central banks income, as we drone on and on about here, comes from the least efficient payment mechanism of all, cash. Surely there’s some tension here?

Peter concluded “So will the EU win the ‘War on Cash’ and achieve improved efficiency in payments? Without focus and leadership this appears unlikely. Fragmentation will grow as will the eurozone’s costly cash mountain. Sadly the indications are Europe’s payments sector productivity will take years to achieve best in world performance”. A disappointing conclusion, but Peter is, of course, right.

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