The Evolving ACH Landscape

We’ve been tracking blockchain, distributed ledgers, etc for a number of years, and we’ve always been enthusiastic with the promise…but pointed out that it isn’t quite there yet, at least for payments. An announcement today caught our eyes:

"The Innovation Engineering team at Royal Bank of Scotland has built a Clearing and Settlement Mechanism (CSM) based on the Ethereum distributed ledger and smart contract platform."

In the Finextra article announcing it it says:

"The test results evidenced a throughput of 100 payments per second, with 6 simulated banks, and a single trip mean time of 3 seconds and maximum time of 8 seconds," states the bank. "This is the level appropriate for a national level domestic payments system."

So first the positives. That’s significantly higher throughput than any other test we’ve seen so far, by a fair margin. It’s also faster than many other systems.

But…

We’d perhaps take issue with “appropriate level” though. Not a criticism of the test or the technology, but more a reflection of the task.

100 payments per second sounds an awful lot to those not in payments. With 86,400 seconds in a day, that’s 8.4m transactions a day. UK Faster Payments in August was running at around 3.2m transactions a day. Yet of course payments don’t flow uniformly through out the day or even day by day. Anecdotally, we’ve been told that c.70% of Faster Payment transactions are sent between the last settlement of the day and the first one the next day, a window of c. 16 hours. But realistically few of those will be made at, say, 3am. The actual window is therefore closer to 8 hours or less for those 70%. That means, even if they are running evenly, it's approximately 110 transactions per second.

The system will be scalable, so it would seem feasible for Faster Payments to be replaced by what was tested. However, in fact it perhaps highlights the real issue. On an average day, it would cope. It’s planning for the unaverage day that’s the issue. The UK ACH system, BACS, highlights this well.

BACS processes on an average day roughly 15m transactions. Given the operating window for the actual processing (10pm to 4am), that’s actually c. 700 transactions a second, significantly higher that the test through-put. But systems have to be designed to cope with worst case scenarios, referred to as peak days. These occur when month ends meet quarter ends meet various other things such as Public Holidays. The BACS record peak day to date is 103.7m. That’s a staggering 4,800 transactions a second.

What do we learn from this?

The technology being tested has evolved rapidly, and is continuing to do so. The volumes now being processed are rising rapidly. Yet today the technology probably isn’t ready for a national payment system quite yet, with the exception of some smaller countries or for specific lower volume systems such as high value. Furthermore, it's important that the systems are tested from a peak day plus a comfortable amount of head room on top (nobody wants to operate at 99.99% capacity!)

But compared to as little as 18 months ago it, the conversation has shifted noticeably from could it replace to should it replace, signifying the very real possibility that it will happen in the near future. Coupled with APIs and PSD2, the payments industry could look radically different in less than a decade.

 

 

US EMV Migration: Looking for the Silver Lining in the Clouds

It would be easy to assume that the migration to EMV in the US has gone terribly. The press is full of stories about slow transactions, inconsistent customer experiences and slow merchant adoption. Whilst not living this day-to-day, I also experienced this frustration first-hand on my trips to the US earlier this year; I wrote about it in a previous blog.

And yet, while the end customer experience clearly must improve, real progress has been made. Back in June, Visa reported "over 300 million chip cards in market and 1.2 million merchant locations." In August, MasterCard announced that "80 percent of its U.S. consumer credit cards have chips" and reported seeing "1.7 million chip-active merchant locations on its network, representing nearly 30 percent of the U.S. merchant population and a 374 percent increase in chip terminal adoption since October 1, 2015." Of course, these numbers would be far more impressive if the liability shift was happening in October of this year rather than last. However, EMV migration does not happen overnight, and in the market as complex and diverse as the US, it was always expected to take many years, especially considering the early reluctance and skepticism of the industry, and the additional complications in debit.

One of the challenges for merchants is getting their new EMV terminals certified, which can take a long time, especially when there is a backlog of demand. To alleviate the problem, in June both Visa and MasterCard have relaxed terminal certification requirements by reducing the number of tests, giving acquirers more freedom and responsibility in the certification process, allowing standard configurations and providing more resources to value-added resellers (VARs).

Also, recognising that it's not always the merchants' fault that they are behind with EMV implementation, both networks introduced measures to minimize chargeback costs to merchants who have not yet transitioned to EMV. For example, MasterCard has "checks and blocks to ensure that chargebacks follow the liability shift guidelines", such as not allowing chargebacks on fraudulent ATM and fuel transactions, where the liability shift has not yet taken place. Visa has taken a step further and announced that from July 22, Visa would "block all U.S. counterfeit fraud chargebacks under $25", while from October 2016  "issuers will also be limited to charging back 10 fraudulent counterfeit transactions per account."

Of course, there is a risk that rather than incentivising merchants to speed up EMV adoption, these changes to the network chargeback policies will reduce the pressure on merchants to migrate. Verifone, one of the largest POS companies, has reported lower revenues for Q316, partly as a result of "lingering EMV adoption issues", and has stated that their "outlook for Q4 now assumes a significantly slower EMV rollout." Not surprisingly, Paul Galant, CEO of Verifone, has emphasised the company's "relentless execution" on "the long-term vision for Verifone to transform from a box shipper to a services provider."

Nobody is under illusion that EMV migration in the US will be over any time soon. However, we must recognise that real progress is being made. Changes introduced by the networks, as well as new liability shift dates, such as for MasterCard ATM transactions coming into effect in October this year, should help keep the momentum going. And while the consumer adoption of various contactless pays, such as Apple Pay and others, has yet to "set the world on fire", perhaps they will end up giving another reason for merchants to invest into chip terminals? After all, for the optimists amongst us, every cloud has a silver lining.

Accepting Nominations for Model Bank 2017

It is my pleasure to announce that we are now accepting nominations for Model Bank 2017. The nominations window will be open until November 30.

Our regular readers should be familiar with Model Bank. We began the program in 2007 and are celebrating its 10th anniversary this year. Celent Model Bank is awarded for best practices of technology usage in different areas critical to success in banking, and is the main award that a financial institution (FI) can win from Celent. The award is only available to the FIs, although we are aware of and appreciate the critical role the technology vendors play in the success of those initiatives, as well as our program.

The essence of Model Bank program hasn't changed throughout the years – FIs themselves select and submit their various technology initiatives to us. We judge those initiatives on three core criteria – business benefits, degree of innovation, and technology or implementation excellence. The winners receive their awards during Innovation and Insight Day, Celent's flagship event, and the case studies of winning initiatives are featured in Celent reports.

Yet, every year we continue to make subtle changes, as we seek to improve the Model Bank program and ensure it stays relevant in the fast-changing world of banking. This year, we revised the categories in which we will be judging and awarding the initiatives.

For 2017, we are accepting nominations in five categories:

  • Customer Experience
  • Products
  • Operations and Risk
  • Legacy Transformation
  • Emerging Innovation

This year, we also created a page on our website dedicated to Model Bank. On that page, you will find more detailed descriptions of this year's award categories, and links to the nomination form as well as various PDF documents, containing the list of previous Model Bank winners, an example case study, and the PR guidelines for winners. You will also find answers to an extensive list of Frequently Asked Questions about the program, how to apply, how we judge the initiatives, what happens if you win, etc. We strongly encourage you to spend some time going through various FAQ pages. Of course, if you still have any questions that are unanswered, please contact us at modelbank@celent.com.

Last year we received well over a hundred nominations and awarded 19 initiatives. Yet, we know that the pace of innovation and change in the industry hasn't slowed down, so we hope and expect to see lots of exciting initiatives this year again. We look forward to hearing from you. Just don't forget, the deadline is November 30, 2016.

Good luck!

Challenging the Status Quo: Fintechs and Corporate Treasury Services

The rapid rise of Fintech firms offering non-bank financial services is triggering what some consider “creative destruction” in banking. Recognising that technology is a key enabler for efficient treasury operations, an increasing number of Fintech firms are creating specialized solutions for corporate financial management.

Four key external forces are supporting the rise of non-bank financial services:  Economic influences, demographic changes, regulatory environment, and technology evolution.

Non Bank Financial Services

A confluence of economic influences has lowered the barriers to entry for Fintech startups. Most significantly, global interest and investment in Fintech firms has risen dramatically over the past five years.  However, only a small percentage of Fintech investment is targeted at serving large corporations, a sector ripe for investment and innovation.

As baby boomers retire, financial management staff is getting younger reflecting the demographic changes influencing Fintech growth. Accustomed to intuitive, easy-to-use technology tools accessible from anywhere, younger staff expect more in the way of treasury technology than Excel spreadsheets to streamline, digitise, and automate financial management functions across treasury and finance. This is especially true with respect to payments, one of the hottest areas in the Fintech space.

While the regulatory environment for traditional financial services firms continues to become more complex, Fintech firms benefit from an almost complete lack of regulation. Regulators acknowledge the need to oversee the safety and soundness of Fintech firms but also recognise that excessive regulation can stifle the development of more efficient financial services. Thus, regulatory bodies are working on frameworks to strike the appropriate balance between innovation and protection.

Fintech firms excel at leveraging the technology evolution to create a differentiated customer experience. Rather than serving the breadth of corporate customers’ treasury management needs, Fintech firms can cherry-pick narrow segments for their offerings.  Newer technologies such as web, cloud, mobile, big data, and artificial intelligence allow Fintechs to develop new value propositions at a lower cost than traditional development approaches.

As discussed in the new Celent report “Challenging the Status Quo: External Forces Supporting the Rise of Non-Bank Financial Services,” Fintechs are unbundling traditional corporate banking services, leveraging emerging technologies to offer new, innovative treasury solutions. But recognizing that universal banks have unrivaled experience meeting the complex needs of corporate customers, many Fintech firms are collaborating with banks through a number of different innovation models. This report is the fifth in an ongoing series of reports commissioned by HSBC and written by Celent as part of the HSBC Corporate Insights program.

Register now for the upcoming joint HSBC and Celent webinar on this topic featuring Nadine Lagermitte, Global Head of Financial Institutions at HSBC.

Corporate Onboarding: Starting the Relationship Off on the Right Foot or Putting Your Foot In It?

Just for a moment, imagine that you are a corporate treasurer, forced to find a new lead transaction banking provider because one of your incumbents is either getting out of the business, prefers to work with companies that are smaller/bigger/borrow more money or has closed down its operations in several countries where you do business. You have gone through the effort of creating a complex RFP and sent it to 3 or more banks and after an exhaustive search and extensive contract negotiations, you have made your decision and it's time to start the onboarding process.  You are excited to move your banking activity to a new provider that has done such a masterful job of convincing you of their superior products and solutions, their investments in leading edge technology and their world-class customer service.  And then reality hits….the onboarding process kicks into high gear.  You understand that banks are facing increasing regulatory scrutiny in the areas of KYC and AML because even your current providers are looking for regular updates for compliance purposes.  But you hope that the process has been streamlined since the last time you established a new primary transaction banking relationship.  After filling out reams of paper documents, fielding multiple calls from different areas of the bank asking for the same information you have already provided, pinging your bank relationship manager for status updates on a weekly basis, and wondering out loud more than a few times…. "why did I choose this bank?"….the onboarding process is finally complete ((except for some of those more complicated host-to-host integration pieces) and it only took twelve weeks from start to finish.

As described in a recent Celent report titled Onboarding in Corporate Transaction Banking: Prioritizing Investments for Reducing Friction, transaction banking providers have lots of room for improvement when it comes to starting the relationship off on the right foot. Our thesis is that improving the onboarding process from a client-centric perspective should be one of the most important priorities for transaction banking. Whether establishing a new relationship or assisting a client in expanding an existing one, implementing transaction banking services in an efficient, timely, and transparent manner can be a key demonstration of a bank’s commitment to client-centric innovation.

Even with significant technology investments over the past decade by banks to improve components of the onboarding process, it is common to hear frustration on the part of corporate clients about its manual nature, the increase in the amount paperwork being requested by banks, the length of time it takes to be able to use the account or services, and the lack of visibility into the process. It's easy to blame the regulators but the bottom line is that most banks are investing in components of onboarding to check off the compliance box and in some cases, are actually adding friction to the onboarding experience for clients rather than removing it.

20160801-Onboarding Report slides_WORD-READY

But there is hope.  The current generation of KYC industry utilities, document management technology, business process management platforms, and digital channels presents an opportunity for banks to reduce friction in customer onboarding.  The fundamental question is with so many opportunities for improvement, how should banks prioritize?  Well, let's get back to our imaginary corporate treasurer.  How would she prioritize?  What would she say if we asked how the onboarding process could be improved so that instead of frustration at the start of the relationship, there is a sense of confidence that she's chosen the right bank?  Clients have experience working with several or many different transaction banks, and just as they compare the different digital channels and service quality of the banking solutions they use, they also can offer a view of how a bank’s onboarding capabilities stack up against its competitors. Corporate treasurers indicate that more self-service capability, shortened timeframes, better coordination across the bank, and enhanced visibility are all high priorities for clients.

We think that banks need to have two guiding principles for enhancing the onboarding process: 

  • enabling both internal and external visibility to eliminate the onboarding “black hole,” to reinforce accountability of all parties, and to allow for more effective collaboration
  • focusing on improvements with direct client impact, for example, reduced number of interactions, reduced requests for information already on file, digitization, consistency across geographies wherever possible, clear and concise documentation, and aggressive SLAs for onboarding

There are a few banks that get it:  they not only ask for client feedback about onboarding but they listen and adapt.  They make it a high priority because they recognize that the "digital journey" isn't just about retail banking anymore. If anything, the digital experience is even more critical for corporate clients who look to their transaction banking partners to enhance the efficiency of their treasury operations through digitization.  If you can't demonstrate your commitment to innovation by offering a client-centric digital experience during the onboarding process, then your are selling your investments in digital banking solutions short. And that's putting your foot in it for sure!

 

 

 

 

Will Banks Eventually Lead in Retail Digital Sales Growth?

I subscribe to Marcus & Milichap’s research blog. Getting my head out of banking from time to time is refreshing and provides useful perspective. A recent blog post commented on the changing make up of commercial property construction as a result of the continued growth in digital commerce. The completion rate of new construction (measured in millions of square feet) has been roughly a third of its pre-2008 boom. Dramatic indeed!

No big mystery, however. As retailers close stores (Macy’s is a recent example), property developers must re-adjust their development to sustain revenue growth. As large merchants exit, they’re being replaced with smaller service providers – restaurants, medical practices, financial planners and grocery stores – mostly services that are less likely to migrate online. Digital plays a role in my healthcare, for example, but I’m still going to see the doctor next week for an annual physical. It helps to do that indoors.

That got me thinking. Three years ago, Celent predicted a steep decline in US branch density based on an analysis of branch dynamics in other developed markets and changes in store densities in other retail categories. In part, we argued that reductions in store densities have been non-uniform across retail categories for a reason. In the final analysis, as commerce becomes more digital, fewer brick and mortar stores will be needed to fulfill the same level of demand. We argued that two variables play an important role: the susceptibility to digital self-service and the degree of product differentiation. Arguably, retail banking is highly susceptible. Loan rates are easily compared online, but you may want to try on a new pair of pants before buying.

Danger Zone for RetailSo, why is the reduction in US branch density occurring more slowly than other retail categories? In part, because industrywide retail banking sales mix lags other retail categories in its migration to digital. How do we know this? Through June 2016, digital commerce accounted for 13% of all US core retail sales. How does that compare to retail banking? According to a survey of Celent’s Branch Transformation and Digital Banking research panels, US banks and credit unions lag considerably, with roughly 90% of sales occurring in the branch or contact center.

sales channel mix

Here’s one reason I think this is so (see below).

shopbuyuse

Banks have invested heavily in migrating transactions to self-service (the “use” part of financial services) with polished transactional capabilities in the digital channel, but have paid comparatively less attention to making shopping for and buying financial services digitally frictionless. That’s now a high priority for a rapidly growing number of institutions at present. Good thing!

As banks do so, they will be rewarded with rapidly growing digital sales. In the past 12-months ending in June, total non-store retailer sales grew 14.2% YOY according to the U.S. Census Bureau and Marcus & Millichap Research Services.  Over the same time period Bank of America’s digital sales grew 12% YOY, representing 18% of total sales according to its July financial results presentation.

So, will banks eventually lead in retail digital sales growth? Absolutely – Bank of America is already there!

Cash isn’t dead..and unlikely to be either

My first post in this focussed on a survey from the US which suggested that cash would be dead in the US within a generation. And as my blog points out, that is highly unlikely for many other reasons, not least because millions of US citizens can only use cash currently.

This second post was triggered by a report hosted on LINK’s website, (the UK ATM operator) that had some interesting numbers in it. Some of the data was incorrectly reported in places as signifying the death of cash in the UK. To be clear, that isn’t what LINK or the report claim.

I think we need to step back from the figures first, and see what they’re actually saying.

By volume, cash represents 45% of all transactions in the UK. That is a significant shift, in a relatively short period of time – indeed, a drop of 6% last year, around 1 billion transactions lower than in 2014. This is what caught the eye of many people, and why they made their predictions.

But let’s look at the figure another way – at 17 billion transactions, that’s both more than nearly all the other payment types added together, and 70% more than the payment type with the second highest usage (debit cards).

That's not to say we shouldn’t dismiss the changes. In 2005, cash accounted for 64% of transactions by volume. By 2015 that had dropped to 45%; by 2025, the forecasts suggests just 27%. I think that's a triffle low, but we're only differing by a percentage point or two.

However, we still have to put that number in context. With a forecast drop of over 1/3rd over the coming decade, it would still leave the volume of cash transactions with a greater combined total of Faster Payments, CHAPS, Direct Debit and Direct Credit that we see today. It's therefore as much that the other payment types are growing as payment types falling.

Once you scratch below the surface, it becomes clearer.

One concept I have talked about in my reports  Noncash Payments: Global Trends and Forecasts, 2014 Edition is that of payment occasions and payment frequency. The occasion is why you make the payment – utility bill, mortagage payment etc – and the frequency you make it.

One of the reasons for the large decline in share of payments has been in the growth of contactless payments, and in particular, their usage for the London Transport system. This is a good example of how occasion and frequency make an impact. Until recently, most commuters in London would use an Oyster card, with cash rarely used (and indeed, banned on many buses). This took a large volume of cash transactions out of the mix – previously that saw 2 transactions a day, times every day commute, equalling approximately 550 cash transactions a year.

With Oyster, that became a card transaction to top up the balance on the oyster card, rather than a per journey transaction. Even estimating topping up once a week (more likely to be monthly I would imagine), that’s 52 transactions a year maximum.

The difference today is that many people now use their contactless debit cards instead of an Oyster card, resulting in a card payment every day – so from 52, to more than 200 a year.

The net result is cash usage drops significantly, with a corresponding smaller increase in card volumes, followed by a larger increase in card volumes. Yet still just one payment occasion.

The point in highlighting this? Reducing cash will have to be done on an occasion by occasion basis. There are some big wins out there – even just making all transportation cashless for example – but the challenge is that there is a very long tail of occasions that rely on cash.

The second challenge is whether the Government even allows cash to die. The case for removing cheques is much easier to make, and far easier to do, yet the Government has told the industry that it can’t. On that basis, it’s difficult to see under what circumstances that the Government would ever allow even a discussion about cash retirement.

Cash lives. Long live cash.

Blockchain Use Cases for Corporate Banking

Corporate banking has long been a relationship-based business, with large global banks having the distinct advantage of being able to provide clients with a comprehensive set of financial services delivered through integrated solutions. Distributed ledger technology, often referred to as blockchain, threatens to disrupt the sector with its potential to improve visibility, lessen friction, automate reconciliation, and shorten cycle times. In particular, corporate banking use cases focusing on traditional trade finance, supply chain finance, cross-border payments, and digital identify management have attracted significant attention and investment.

Traditional Trade Finance: Largely paper-based with extended cycle times, DLT could eliminate inefficiencies arising from connecting disparate stakeholders, risk of documentary fraud, limited transaction visibility, and extended reconciliation timeframes. DLT could finally provide the momentum needed to fully digitize trade documents and move toward an end-to-end digital process.

Supply Chain Finance: SCF is commonly applied to open account trade and is triggered by supply chain events. Similarly to traditional trade finance, the pain points in SCF arise from a lack of transparency across the entire supply chain, both physical and financial. DLT has the potential to be a key enabler for a transparent, global supply chain with stringent tracking of goods and documents throughout their lifecycle.

Cross Border Payments: The traditional cross-border payment process often involves a multi-hop, multi-day process with transaction fees charged at each stage. There are potentially several intermediaries involved in a cross-border payment, creating a lack of transparency, predictability and efficiency. DLT offers an opportunity to eliminate intermediaries, lowering transaction costs and improving liquidity.

Cross Border Payment Flows

KYC/Digital Identity Management: Managing and complying with Know Your Customer (KYC) regulations across disparate geographies remains a complex, inefficient process for both banks and their corporate banking customers. For corporate banking, the DLT opportunity is to centralize digital identity information in a standardized, accessible format including the ability to digitize, store and secure customer identity documentation for sharing across entities.

Both banks and Fintech firms alike are experimenting with DLT solutions for various corporate banking uses cases. In what seems like unprecedented collaboration between financial institutions and technology providers, consortias are working on accelerating the development and adoption of DLT by creating financial grade ledgers and exploring opportunities for commercial applications.

The maturity cycle for the various use cases depends on a number of factors, not the least of which are financial institution requirements for interoperability, confidentiality, a regulatory and legal framework, and optionality. We outline both capital markets and corporate banking uses in more detail in the Celent report, Beyond the Buzz: Exploring Distributed Ledger Technology Use Cases in Capital Markets and Corporate Banking. In addition to key use cases, the report discusses the key needs of financial institutions driving DLT architectural and organization choices, the current state of play, and the path forward for DLT in capital markets and corporate banking.

Building the Collaboration Muscle: Optimizing the Bank / Fintech Relationship

At Celent we’ve long said that banks must become better at partnering. And Fintechs have come around to the realization that it’s going to be the rare beast that can compete head-on with incumbent financial institutions – most will fare better by figuring a way to cooperate with them instead.

Eastern Bank, Celent’s 2016 Model Bank of the Year, took this idea one step farther by building Eastern Labs within the bank – an in-house Fintech. While most institutions won’t be able to replicate this (it’s really hard!), there are nevertheless some lessons for banks as they consider best how to engage with smaller, nimbler firms.  The diagram below shows the complementary strengths and weaknesses that banks and fintechs bring to a joint endeavor.

1603Master Slides for Eastern Model Bank Final_009

When they get together, some weaknesses of fintechs are mitigated (e.g., they now have access to data and a brand), while many of the disadvantages of a bank persist (e.g., slowness and risk aversion). Additionally, new complications arise: goals diverge, information may not be completely shared, the cultures are wildly different, and handoffs can be agonizingly slow.

So what are the lessons when a financial institution engages with a fintech? We’d suggest concentrating on four key challenges.

  • Focus on individual goals to ensure that they’re compatible, even though they’ll be different
  • Be as transparent as possible and build that transparency into processes from the beginning
  • Recognize cultural differences and address them at the outset; be realistic about the challenges
  • Set expectations about achievable timelines

Although other complications will undoubtedly arise, partnering is a muscle that banks haven’t exercised much. With practice and training, that muscle will get stronger, and with enough dedication, it will play a vital role in propelling the bank to the next level.

Cash is Dead! No. It isn’t! Pt 1

There is an old Christmas tradition in the UK of going to the panto . It's silly, it's fun, and it's all about children. Audience participation is part of the experience, including calls of "He's behind you!" (or "Look behind you!"), and the audience is always encouraged to hiss the villain and "awwwww" the poor victims. Another convention is "arguing" with a character – "Oh, yes it is!" and "Oh, no it isn't!"

Survey: Cash is dead!

Rest of the world: "Oh, no it isn't!"

Two announcements caught my eye this week, both seeming to proclaim cash is dead, or will be, in our lifetimes. I think this is great news – it means I’m going to live to be hundreds of years old ;-).

I'm splitting the blog in two, as the sources and claims are very different.

The first is a survey by Gallup of US citizens. The headline is 62% of them thought it likely or very likely that we would be a cashless society in their lifetime.

That would be a massive shift. The Federal Reserve estimate that 40% of all transactions in 2014 were in cash. At a crude estimate, that’s somewhere in the region of 70 billion transactions that would need to convert in the next 30 years or so.

Second, the same Fed research shows that if they were unable to use their preferred payment type, 60% chose to use cash as their second choice.

Most importantly, there are significant social issues to address first. FDIC research shows that c. 7.7% of the US population are estimated to be unbanked, with a further 20% underbanked. That means, crudely, over a quarter of the US population rely on cash. They use it for budgeting (known as "jam jarring"), and they may not even qualify to have a form of electronic payment. Even if they do, such as a prepaid card, the fees and breakage on the card make the card far less attractive than cash, which is free.

This is why most discussions use the term less cash, rather than cashless, and why places like Sweden have actively ensured that cash will remain an option, rather than accelerating its demise.

In short, despite what consumers might think or say, the chances of cash dying in the US is far, far lower and further away than the survey suggests. Removing cash from certain use cases is going to be tricky as it would be perceived as penalising lower income families. Even barring cash for higher value transactions will be difficult, as Germany found earlier this year.

Cash isn't dead. It's not even mildly unwell 😉