Despite the rise of electronic payments, the volumes of notes and coins in circulation in Europe continues to rise, making it vital to carry out root and branch reform of cash cycles to tackle chronic inefficiencies, says G4S.
In a report on cash use across 28 European countries, cash management and transportation giant G4S says that the volume of notes and coins in circulation has increased 13% per annum since 2002. Cash now makes up 60% of all payment transactions, while ATM withdrawals increased 14.6% between 2009 and 2014.
However, in eight European countries - including the UK, Netherlands, Sweden and France - electronic payments now make up a greater proportion of transactions than cash.
Graham Levinsohn regional CEO, G4S, says: "What we are experiencing is a fundamental transition in the use of cash across Europe. European consumers and businesses will continue to use cash as part of a multi-payment economy. But we need to modernise how they can use it.
"The cash supply chain is highly fragmented across Europe which creates chronic inefficiency. In the most extreme cases cash could be counted up to 17 times from till to bank. However even in less extreme examples, the same cash is handled and counted multiple times as it is transferred between parties in the cash cycle. This creates an unnecessary cost burden on businesses and banks alike.
"We must work together to drive root and branch reform by streamlining and simplifying the cash cycles of Europe, creating fewer transfers between actors and consequently less duplication of effort. Significant cost efficiencies can be driven through the cash cycle so that cash remains a cost-effective payment mechanism into the future."