3rd January 2022
Cash: Important for a Fairer Economy
Weighing in on the importance of cash for fairer economies tomorrow, various experts from Crane Currency have expressed their views on www.centralbanking.com, a leading information resource, in the world of Central Banking.
Crane Currency’s banknote designer Karin Mörck Hamilton said that “how banknotes are recognized by machines is today at least as important as how they appear to humans”. One might expect a banknote designer to focus on the artistic merit of banknotes and their function in expressing the identity and aspiration of the nation, so Mörck Hamilton placing cash automation on an equal footing with public engagement is instructive. The act of paying, whether by credit card, debit card, smartphone or cash always bears a cost to consumers and businesses, but the huge growth in modern self-checkout terminals is lowering the cost of cash by increasing the speed and accuracy of transactions, while improving security and growing sales.
According to Robert Morrow, an expert in point-of-sale cash validation with Crane Payment Innovations – whose terminals are used in more than 100 countries – automated ‘bill acceptors’ are no longer confined to carwash centers and vending machines, but are now integral to many of the world’s largest retailers. Modern payment terminals routinely accept all denominations of banknotes, including $100 and €200 without any human oversight. Many also issue change using lower-denomination banknotes taken during other purchases. These machines can recognize almost all genuine banknotes regardless of condition and ensure no counterfeits are accepted. This increasing automation of cash acceptance may be one factor driving the growth of the use of cash during the pandemic.
Nearly a decade ago, in the context of an economic history dominated by bouts of high inflation, the Fed set an inflation ceiling of 2%. Then, it seemed unlikely we would see a long period of low inflation and it also seemed the ability to pay with cash would continue to be assured. Covid 19 has magnified economic challenges and inequities, but it has also revealed opportunities to foster economic equality and inclusion. One such opportunity is using the change to a 2% average in the inflation mandate of the central bank of the world’s largest economy to take greater account of the impact of monetary policy on the real economy. Another is the use of technology and legislation to protect point-of-sale use of cash, to prevent exacerbation of the financial challenges felt by some of the most vulnerable in society.