Ensuring safe cash and efficient payment systems
We want to facilitate access to the payment market for innovative companies, while making payments safer for consumers. A further important issue for the Bank is to ensure the quality of euro banknotes: on average each note in circulation in Belgium is checked once a year as to whether it is genuine and clean. In addition, we make sure that cash remains a readily available, efficient, safe, socially inclusive and accepted means of payment. The security of cash transports and ATMs is a further important topic in discussions with the sector.
Innovation and safety on the payment market
Interest is constantly increasing in financial technology – or FinTech – offering innovative processes, products or services in the financial sector. As a result, the Bank, together with the Financial Services and Markets Authority (FSMA) has established a joint FinTech point of contact to make the regulations governing financial innovations and the expectations of the regulators more comprehensible for these innovative Fintech companies. We want to facilitate access to the payment market for innovative companies, while making payments safer for consumers.
High-quality and trustworthy euro banknotes
Although alternative means of payment are steadily gaining ground, banknote circulation in the euro area continues to grow. Individuals continue to hold a share of their assets in cash, thereby retaining a claim on the central bank and indicative of growing confidence in the central bank in difficult times.
An important issue for the Bank is to ensure the quality of euro banknotes: on average each note in circulation in Belgium is checked once a year as to whether it is genuine and clean. Alongside counterfeit and soiled notes, our machines for example also take fraudulently glued-together notes or notes stained with security ink out of circulation. We work closely with the federal police to combat counterfeiting. For everyone whose work involves handling cash, we organise hands-on training sessions free-of-charge, teaching people how to recognise the authentication features of euro banknotes.
Within the whole euro area, 24 out of every million banknotes in circulation are counterfeit, a figure that has been declining for several years.
Cash as a legal, available and generally accepted means of payment
We make sure that cash remains a readily available, efficient, safe, socially inclusive and accepted means of payment. For example, cash remains very important for those unable to use other means of payment or who have difficulty keeping their budget under control. It is also anonymous and an alternative to electronic payments in the event of a major breakdown of the payment system.
In Belgium, more than 50% of private transactions are paid in cash. The average for the whole euro area is 73%, a figure exceeded by the southern euro area countries and by Germany and Austria. The figures date back to before the outbreak of the COVID pandemic, with a new study scheduled for 2022.
We will continue to discuss with all interested parties all cash-related aspects within the recently established National Retail Payments Committee chaired by the Bank. A host of restructuring measures are currently under way in the sector. For example, the four major Belgian banks are establishing a joint ATM network.
A safe and efficient cash cycle
Cash security remains a further important topic in discussions with the sector. Belgium has played a pioneering role, adopting innovative progressive legislation in the field of secure money transport. A lot is also being done to ensure the safety of ATMs. The sector knows that it can count on our operational expertise and resources. Our Business Continuity Plan has already been put into practice a number of times in the past.
To keep the cost of cash as low as possible, the Bank is intent on continuing to play its role in the cash cycle. Our new highly automated Cash Centre in Zellik will be a great help here (see also "Being a green and sustainable organisation"). Moreover, we will be discussing with banks and money transporters ways of making the handling and transport of cash as cost-efficient as possible.
Our efforts in making the cash cycle as effective and efficient as possible help to lower the ecological impact of cash. In addition, the Eurosystem is taking a number of initiatives to reduce the ecological footprint of cash, for example aiming to use 100% sustainable cotton for the production of euro banknotes by 2023.