Cooperating to Secure Cash

One of the defining characteristics of the mint industry, compared with the banknote industry, is the level of cooperation between the various producers. Another has been its apparent stability. Perhaps the two are related. But whilst this stability is rapidly disappearing, the spirit of cooperation is not just very much alive and kicking but spreading throughout the whole cash community.

The minting community has woken up to the fact that its core product is under threat. A decade ago, the prevailing view was that coins have always been around, ergo they will always be around. The mints don’t think like that anymore – their often century long histories and the fact that the majority are still state-owned cannot safeguard them from changing payment behaviour.

Hence their increasing engagement in the broader cash industry. The coin and banknote communities, which have often clashed in the past, are coming together to defend and promote their common interest – namely a healthy and functioning cash system.

This is welcome, and long overdue. For too long there has been a view that coins are the ‘poor relation’, and even seen in some quarters as a threat to banknotes. However, the threat from the payments industry means such attitudes are counter-productive.

The evidence of growing cooperation, between the mints, between mints and banknote producers, and between all the players in the cash cycle and beyond, is gathering pace.

First is the launch of not one but two new associations for the minting community. One, the International Mint Directors Network (IMDN), is the successor to the grouping known as MDC (Mint Directors Conference), with a focus on advancing and promoting the best in coins, be this in sustainable production, or new channels for public engagement.

The second is the International Mint Industry Association, which is focused on advocacy and lobbying.

Then there is the MDWG (Mint Directors Working Group), comprising 28 mints and NCBs in the eurozone. It has joined forces with the banknote community to commission and fund a study entitled ‘The Environmental Impact of Cash vs Digital Payments’, which is believed to be the first example of coin/banknote cooperation on this scale.

Alongside these changes in the coin industry are the activities of associations such as the International Currency Association (ICA) and the International Association of Currency Affairs (IACA), both of which encourage participation from both coin and banknote producers. In parallel is the think tank CashEssentials, among whose members and partners are not just companies involved in cash management and banknote production, but also Monnaie de Paris, which is emerging as the most vocal advocate for cash amongst the minting community.

We are also seeing national advocacy groups develop, such as Denaria in Spain, which involves cash service providers and consumer groups. In Austria consumer groups are working with the Austrian central bank and mint to support a framework for cash use in the future.

The Cash Covenant signed earlier this year by 23 organisations involved in the Dutch payment system is slightly different, in that the Dutch National Bank (DNB) led this as a counter to the steady increase in electronic payments in the Netherlands and the effect this has had on cash usage. DNB wants to ensure that cash continues to function properly as a means of payment. The covenant was signed by the major banks, the Dutch Payments Association, representatives of consumers, retailers, the hospitality industry and fuel stations, as well as by providers of cash services, and the DNB.

Clearly the cash community can’t compete in monetary terms with the marketing budgets of the global payment industry members such as Visa and Mastercard. What it can do, and clearly is doing, is organise to make the case for what is, after all, still the world’s favourite way to pay.

The cash industry can, and must, continue to put the facts about cash in front of central banks, legislators and regulators, to work with groups in society who see the value of cash for lower income groups, the disadvantaged, small businesses and pro-choice campaigners, and ensure that the economic, environmental and social costs of cash are as competitive as they can be throughout the cash cycle.

All that the industry is asking for is a level playing field – one in which choice is available and where the real value of cash is not hidden by the bigger marketing budgets, commercial power and louder voices of big payment companies. Cash mustn’t be ‘bullied’ out of the market.

The competitive pressures within the cash industry will always be there. Suppliers have products and solutions to sell, and nothing should get in the way of normal competition and market needs.

But such cash products and solutions can only exist in an environment where the demand for cash exists. This spirit of industry cooperation, and putting aside of competitive interests, is essential if that environment is to continue to exist.