Taking the Message to the People

What do grey squirrels and cashless payments have in common? Admittedly, the link isn’t obvious. The grey squirrel, classified as vermin in Northern Europe because it is decimating the population of the native, cute and fluffy red squirrel, is referred to by many as ‘a tree rat with good PR’.  The connection is the power of PR (public relations) to generate a message that favours your subject, be it a grey squirrel or the cashless industry. 

We have long argued that our industry needs a voice – to promote cash – not necessarily to lobby, but simply to ensure that the virtues of cash receive a fair hearing out in the public domain compared with cashless forms of payment, in particular the new, ‘sexy’ digital forms such as e- and m-payments. There is certainly plenty of ammunition to support this case.

Take the recent presentation by Mike Lee of ATMIA entitled The Voice of Cash, which provides a detailed list of the ‘magical’ properties of cash – namely, it is the most tangible and liquid form of money, provides instant settlement and a store of value, is universal, has certainty of acceptance, ease of use and access, is fee-free (for end users), energy-friendly and fast. This presentation also provides detailed figures on the global use of cash – such as the fact that $14.413 trillion consumer payments were made in 2010, compared with consumer payment by cards (excluding commercial payments), of $9.582 trillion.

The presentation also outlines detailed figures on the rising use of cash in the US, UK, Canada, Europe, Brazil, China, Japan, Russia and South Africa, concluding that ‘there is virtually zero chance that cash will be withdrawn from society within the next generation (ie. 25 years). There could easily be another hundred years of cash.’

This is a powerful message, and is backed up by Retail Banking Research’s latest predictions that the number of ATMS will rise to 3 million by 2015.

A similar point in terms of the benefits of cash was made by Ravi Menon of the Monetary Authority of Singapore in his opening address to the Currency Conference. ‘Cash is still king’, he said, and it is growing at an average of 7% per year in Singapore. He underlined the key requirements of any payment system as Convenience, Confidence and Cost-Effectiveness (the three ‘C’s), concluding that ‘reports of the demise of cash are vastly exaggerated.  Notes and coins have been with us a long time, and have served a crucial role in the growth of the modern economy.  I suspect they will be with us for quite some time more.’

Admittedly, speaking to the interests of your audience is always a courteous move but, even so, it was a powerful message, and an encouraging one from such an eminent figure, and from a country like Singapore which is in the vanguard where the adoption of new payment technologies is concerned.

Another virtue of cash was apparent in the presentation from Alan Boaden of the Reserve Bank of New Zealand on how the country was able to meet demand for cash in the aftermath of the devastating earthquake that struck Christchurch earlier this year. Enormous damage to physical infrastructure, including bank branches and ATMs, combined with loss of power, meant the means for providing cash were severely restricted at a time when the public needed it most. That the RBNZ managed to meet this demand is testament to its organisational abilities, and the enduring power of cash as the currency of last resort.

In another context, we feature an interview with Michael Lambert of the Federal Reserve. There are many interesting strands to his comment, three of which stand out with relation to the topic of this Comment.

First is that, thanks to new technology, the Fed has been able to more than double the life time of the US$1 bill – not by reducing the quality threshold, but simply by being smarter in processing the notes. This, in turn, has turned the business case of the costs of notes versus coin on its head, as well as demonstrating how, going back to Mr Menon’s point about cost-effectiveness, it is possible to make savings by being smarter.

Second is that, the business case aside, in the US they actually listen to what the people want, and the people clearly want to retain the dollar bill. This is in marked contrast to so many other countries, where a top-down approach is taken by simply removing lower denomination notes and providing no choice. A public engaged in its currency can only be good for the currency.

And third is how easy it is for the media and the blogosphere, the twin conduits for information to interested parties, to take some superficial facts and subvert the underlying truth. Thus the calls to replace the dollar bill with a coin, based on selective use of data and the examples of other countries with completely different circumstances. This, more than anything else, underscores the need for the cash community to proactively frame the message in the context of all the facts, to prevent these being distorted either by parties with differing interests, or simply for the sake of a good story. .

Which brings us back to the original point.  How to make this case? Or rather, who to make this case? As said, there is certainly plenty of ammunition out there. And, one way or another, potentially plenty of organisations to say it.  One description of PR is that it is the practice of turning ‘a pig’s ear into a silk purse’. Our industry isn’t a pig’s ear. It is already a silk purse. We don’t need to twist the message. We simply need to convey it.