SEPA-components:

Cash Payments

Vision of European Commission in NLF (version 1.12.2005: grounds and objectives of proposal)

• As – cash is an expensive payment service– electronic payments are considered as an alternative to

expensive cash

• then – the use of the most cost-effective services in stead of

cash can help realise the objectives of SEPA (efficient, secure, cheap payment system to the benefit of the users)

Bank’s vision for cash in SEPA

• As is:– cash remains the most popular payment instrument for small

amounts (in eurozone: 360 billion cash transactions and 70 billion non-cash), yet amongst the most expensive payment instrument to operate

– the provision and treatment of cash is significantly different between the countries due to local regulations and ‘national traditions’: distinct level of costs of cash per country

– the competition between cash and the other payments instruments is disturbed by the invisibility of the cost of cash to the users and by imperfect externalisation of the cost of cash to actual users partly caused by local regulations

SECA is essential

Bank’s vision in Single Euro Cash Area

• SECA components:– creating an euro which is also the single currency for

banks and professionals• by harmonisation of the core cash services provided by

Eurosystem NCBs (level playing field): network coverage, operational conditions, charging principles

• by the removal of legal barriers preventing an effective cross border cash service provision (transport)

Bank’s vision in Single Euro Cash Area

• SECA components:– reducing costs of cash:

• by applying the best practices for the distribution and recycling of euro cash in the Eurozone (p.e. shortening the cash cycle)

• by the development of common standards at Eurozone level (packaging, transportation, banknotes staining, recyling etc)

• by stability in the framework imposed by authorities (NCB’s , …)

– enabling fair competition among the payment instruments

Belgian Cash Cycle / Chain: euronotes

Counting

Sorting

Packing

Re Issue

Destruction

Central Bank

CIT(transport, cash centres)

Customers (consumers, shops)

Commerc.Banks(branches,

cash centres)

Fit+unfit

Counting

Sorting

Packing

Counting

Sorting

Packing

Counting

Sorting

Packing

Incoming

Outgoing

Recycling

Fit+unfitUnfit Unfit Fit+unfitFit+unfit

RecyclingRecycling