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SEPA for Cash

One important objective of the Single Euro Payments Area (SEPA) initiative should be to encourage a shift from cash to electronic payments. Despite the fact that cash accounts for a falling proportion of retail payments, it is in general still the predominant payment method in Europe and the demand for cash continues to grow. Studies over the years have shown that the social cost of cash remains considerable. In October 2012, the European Central Bank (ECB) released the report 'The Social and Private Costs of Retail Payment Instruments' (see links below). The objective of this study is "to enhance the general understanding of the social and private costs of different retail payment instruments from a European perspective, with the aim of helping policy-makers, banks and retailers promote efficient payments." The ECB report analyses the social and private costs of making retail payments in 13 European countries and discovers that they are substantial, amounting to around 45 billion euros, or almost 1 percent of their combined gross domestic product. Due to the relatively high usage of cash, it accounts for nearly half of the total social costs.

The European Payments Council (EPC) believes that actions by all stakeholders within the euro area could contribute towards reducing the high cost of processing and handling of cash.

Single Euro Cash Area (SECA)

The plans for SECA have been developed in close consultation with the Eurosystem Banknote Committee, banks and other key players. The Eurosystem, which comprises the European Central Bank and the national central banks of the European Union Member States whose currency is the euro, is the monetary authority of the euro area. The objective of SECA is to create, with the Eurosytem, a level playing field where the basic cash functions performed by each of the national central banks (NCBs) in the euro area are interchangeable, e.g. there is a common level of service and common processes are followed by all euro area NCBs.  For more information, refer to the document 'Single Euro Cash Area (SECA) Framework' (see links below).

Improving the Efficiency of the Handling of Cash - Cash Cycle Models 

In 2010, the EPC and the European Security Transport Association (ESTA) established a joint task force to identify best practice principles and, where possible, develop recommendations on how to further improve deploying and re-circulating cash. The considerations of this task force are reflected in the document 'Improving the Efficiency of the Handling of Cash - Cash Cycle Models' (see links below). This document aims to create awareness among participants in the commercial cash cycles established at national level across the SEPA countries of how to improve existing processes and reduce the overall cost of cash. Participants in the commercial cash cycle are parties other than NCBs and consumers taking part in the cash cycle: e.g. payment service providers, cash-in-transit companies and retailers.

Public consultation: the document 'Improving the Efficiency of the Handling of Cash - Cash Cycle Models' was published on the EPC Website on 15 April 2013 for a three-month public consultation. For details on how to participate in the consultation, refer to the links included in the information box below. All stakeholders are invited to provide feedback by 14 July 2013. The document will be updated based on the feedback received from stakeholders and a revised version will be published on the EPC Website later in 2013. The EPC looks forward to continuing the dialogue with all stakeholders on the best way forward to boost the efficiency and, consequently, reduce the high cost of processing and handling of cash in SEPA.

Selection of articles from the EPC Newsletter and other sources