The RBA reviews banknote distribution
The Reserve Bank of Australia has released an issues paper as the first stage in its Review of Banknote Distribution Arrangements.
“We are committed to meeting public demand for banknotes so that cash continues to be available to those who want to use it,” says Assistant Governor (Business Services) Michelle McPhee.
“We place a high priority on the community continuing to have good access to cash withdrawal and deposit services. Having a banknote distribution system that is sustainable in an environment of declining transactional cash use is critical to this goal.”
While the RBA is the sole issuer of banknotes, it says it is but only one participant in the banknote distribution system. This system is the means by which banknotes move between the RBA and the businesses and consumers that use them. It also includes mechanisms to maintain the quality of banknotes in circulation.
The RBA adds that the key elements of Australia's banknote distribution system have been in place since 2001. They were established when cash was the most commonly used retail payment method and have worked well to ensure access to cash for both businesses and consumers.
However, the use of cash for retail payments has been in decline. This fall was accelerated by the COVID-19 pandemic as consumers turned increasingly to electronic and online payment methods.
This has placed pressure on the current cash distribution system. Specifically, lower processing volumes have led to the underutilisation of cash distribution infrastructure and increased the average cost of transporting and processing banknotes.
The RBA’s review will assess what changes might be required to ensure that banknote distribution is effective, efficient, sustainable and resilient – both now and into the future.
Submissions to the review close on Friday 21 January 2022.