The War on Cash rages on and every day we are bombarded with news that the death of the banknote and the coin is becoming more imminent. Many times we in the currency industry have fought the good fight and pushed back against the upstart competition. Perhaps it is time to look at this perpetual competition in a different way.
This is the story of Old and Stable versus Young and Restless
Many people ask questions like, “how long will hard currency remain as a payment option?” or, “why is currency in circulation increasing?”. The most common answers are often born from the emotional perspective of one involved in the currency industry. An associate of mine at Sainsbury’s Bank in the UK was kind enough to recently share with me an infographicÂ depicting the history of coins and banknotes – from a UK perspective. We thought it might be interesting to compare the history of coins and banknotes to that of the credit card, being one of the oldest alternative forms of payment. Again, my friend at Sainsbury’sÂ Bank was kind enough to send me another infographic depicting the history of credit cards.
After reviewing the two infographicsÂ it seemed obvious to us that one of the major reasons for the persistence ofÂ physical currency could well be the fact thatÂ it is so ingrained in our societal habits as a fundamental part of our sense of community. Just look at the figures – physical currency has been in existence since roughly 760 A.D. – the credit card, in its initialÂ incarnation (which was not a card at all) only became a reality in about 1880 A.D.. Simply put, physical currency has more than a 1,000 year advantage over any other form of payment in terms of building trust, accessibility and iniquitousnessÂ as an instrument ofÂ payment. That is our opinion, for what it is worth (couldn’t resist that pun!). Have a look at the following infographics and let us know what you think.