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08 February 2019

Q&A with Piraeus Bank

What do you regard as the most influential drivers for change in cash usage?

Greek society is generally recognized as one of the most cash intensive economies in the Eurozone.  Lately, however, we see that cash usage in Greece is in decline non-cash payment instruments are increasing their penetration rate against cash.

One of the key drivers for that change was the imposition of Capital Controls in 2015, which resulted in a steep increase of electronic payments. The other key driver was of course the introduction of new technologies and the increased penetration of mobile payments and contactless payments. Finally, the State actively supported the electronic payments as a means to fight tax evasion.


What needs to be done to ensure cash is preferred for payment by the public, retailers and commercial banks?

For the public, cash is linked to trust and budgeting control and it is the consumer who finally decides the type of payment instrument he/she will use. On the other hand, there are forces that influence the consumer’s decision and these forces come from the state, the retailers and the banks. So they may push consumers towards or away from cash transactions.

Cash in general encompasses more benefits than any other payment method. It is accessible, it is direct, it is easy to use and can be supported by the inherent state infrastructure.

Retailers also like cash, as it linked with lower handling costs than any other payment option; according to many studies, retailers’ cash handling cost is less than 1/3 of card payments cost.  

Commercial banks are mainly interested in increasing their cash flow, regardless of the way the new in-flaws will enter their books. When it comes to cash their main interest is to maintain a positive customer experience and to ensure an efficient and cost-effective cash cycle model.

To keep cash the dominating payment instrument for the consumers, it must be ensured that consumers will have access to it, the State will continue to support its reliability and accessibility and the commercial banks and retailers will increase the efficiency of their cash handling operations.


What is the level of cash usage necessary to keep cash cost competitive?

Although until 2016 the Greek economy was the most cash intensive economy in the Eurozone, the cost of the entire cash cycle in Greece was extremely high. The lack of automated cash handling infrastructures and the close to zero TCR technology penetration were the most important factors for that.

By 2018, more than 60 cash distribution centres were operating in the Greek market, providing cash supply facilities for both the retail and the commercial banking sector. However, most of the investments that were made mainly concerned the facilities, security and cash handling machines and did not extend to fully integrated automation solutions. This has a result, the cash handling automation rate to remain low and to have an inefficient and labour-intensive cash cycle model.

To improve the economics of cash usage, the automation level of cash handling operations must be imported into the equation, as an important cost factor.    


How important is the cost of cash - making cash withdrawals and cash deposits convenient or making cash easy to use compared to the alternatives - in securing the future of cash?  Or is there another more important factor?

The cost of cash significantly differs depending on which side one is seating. For retailers for example, most studies agree that it is significantly lower than the cost of cards, as it has already been mentioned above; for consumers it’s free of charge. If you look at the cost of cash usage independently of identities, then you can say that there are a number of significant and “hard” costs that cannot be avoided, e.g. transportation costs, processing costs, etc. Therefore, cost is an important factor, but it’s not the leading one. Security, availability, budget control are also very important factors that drive consumers’ behaviour. 

Consumers demand free of charge transactions, positive experience and, naturally, convenience, retailers want to minimize transaction costs, hence showing preference in cash payments and, the State, has two opposing roles, one as the issuing authority and hence sponsor of cash, and one as a tax authority, favouring cash-less payments as a tax evasion tool.

The challenge for the future of cash looks like a three-sided “tag-of-war” among consumers, retailers, and the State.


What role is your organisation playing in keeping cash a vibrant, preferred payment tool?

Piraeus Bank is the leading commercial bank in Greece, with the largest cash point network in the country. We are very proud to say that we have a state-of-the-art cash handling facility and we are using top of the class machineries and software solutions. We are in the process of further automating our cash cycle model with the introduction of additional automations. Also, we are market leaders in cash handling solutions offered to customers with an extended base of corporate clients already using them. We follow our customer needs and expectations, trying at the same time to increase the efficiency of our cash cycle and minimising the cash handling costs.

Therefore, I think that it goes without saying that Piraeus Bank is playing a major role in keeping cash a vibrant payment tool.


Efi Chatziantoniou                                                                     Evangelos Kontomitros


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