OeNPAY Challenge Lead 2022



“How might we ensure cash service availability for all cash cycle participants and create a regionalized cash cycle so that we keep the usage of cash attractive?”

Decreasing cash usage at the POS has been amplified by COVID-19 and miscommunication. Further, banks are reducing their branch networks to become more cost efficient. This reflects also on their cash services (cash desks as well as automated solutions such as ATM/cash recycler-services) for the public and local retailers. Consequently, the availability of cash services and the accessibility to cash especially in rural areas deteriorate over time.

Regarding the cash cycle, sustainability can be reached mostly through economies of scale in the distribution and through recirculation. Production, issuing and disposing issues of cash are very heavily regulated and out of scope of this challenge.

Less cash in circulation means more effort to keep an efficient amount available, especially in terms of crisis. Also, easy accessibility for the public not far from where they live is an issue that should be tackled.

One of the OeNB´s subsidiary is called GSA (www.geldservice.at) which operates nationwide in the field of cash logistics. GSA operates 7 cash centers nationwide throughout Austria.

  • Important participants in the cash cycle are also cash in transit companies
    which deliver and return cash to banks, retailers and the service industry and offer various auxiliary services.
  • Banks have sourced out a large share of their cash operations to GSA and cash transport companies and are trying to reduce their operational footprint.
  • Certain retailers already offer the so called “cash-back” solution.
  • A number of municipalities in Austria are paying ATM operators to continue operating ATMs in their area in order to keep cash accessible for the wider population. Whereas banks generate fee income from the usage of cards (interchange
    fee), the distribution of cash generates costs. Banks charge however for the return of cash / deposits to their accounts. The way cash is being produced and checked for fitness and authenticity is strongly regulated and not part of the challenge (Legal requirements –
    Oesterreichische Nationalbank (OeNB), Environment, health and safety (europa.eu), Banknote production and stocks (europa.eu). Euro banknotes and coins are legal tender > means of payment universally accepted, reliable and inclusive.
  • We believe that cash is essential for society as it is a very inclusive form of payment.
    Cash is resilient and in times of crisis people automatically resort to cash.

The Austrian situation is in general good compared to other countries. Nonetheless while keeping an eye on the rest of Europe we need to do our homework regarding the following aspects.

  • no balance between electronic payment systems and cash (customers relies on electronic payments – possibly leads to rising fees due to the lack of competition, some parts of the population may be excluded from participating in the economy; small local retailers would depend on cardschemes -fees, low bargaining  power)
    • reduced usage of cash threatens current economies of scale making cash economically non-viable, which leads to a loss of the current infrastructure.
    • less resilience: reduced local access to cash services and infrastructure if a crisis occurs or if there is a sudden increase in demand (demand is always higher in times of crisis, eg withdrawals at the beginning of the first lockdown 2020, Ukraine-crisis). Cash can be used independently of technology and
    third-party providers.
    • cash as tangible means of enabling financial literacy is lost (small children cannot have bank accounts, studies have proven that children learn to handle money best if they deal with “physical” money; Eurologisch – Finanzbildung durch die Oesterreichische Nationalbank)
    • shift to online markets, no value chain in the region
  • technical enhancement for already existing ways to obtain cash (both for the public and small retailers)
  • involvement of regional stakeholders
  • infrastructural opportunities
  • solutions for retailers and service providers to efficiently deposit their cash income (or recirculate it)
  • solutions to keep cash in the cycle / the region

The OeNPAY Financial Innovation HUB GmbH (OeNPAY) runs a competence network that supports the digitization of payments across Austria and promotes financial innovation in cooperation with all payment stakeholders. The OeNPAY is a 100% subsidiary of the Oesterreichische Nationalbank (OeNB), Austria’s central bank.

Do you want to explore more challenges?