Slide 1: Cautionary Statement
Cautionary Statement This presentation contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or our future financial performance, including, but not limited to, strategic plans, potential growth, planned operational changes, expected capital expe
Slide 2: Payments innovation and the future of cash
Payments innovation and the future of cash The Loomis Future Cash Use Study Patrik Andersson, MSc., MSc. (Hons.) VP Group Strategy Development
Slide 3: The reports of my death are greatly exaggerated
―The reports of my death are greatly exaggerated‖ • Six decades of counting cash out —American author Mark Twain on an obituary published by mistake in 1897. • 1956: Living high without money —New York Times, 2 December • 1966: The cashless society —The Economist, 9 July • 1976: United States – a ca
Slide 4: Cash, at risk?
83 Cash, at risk? at LevelUp Mm-»PESA PayPal VISA c® MasterCard Worldwide
Slide 5: Total cash use will continue to increase over the next ten years at half the rate of real economic growth
Total cash use will continue to increase over the next ten years at half the rate of real economic growth Real GDP Cash use 1.3% CAGR* (*) Deflated 84
Slide 6: Study insights: Cash use can rise even if consumers use less
Study insights: Cash use can rise even if consumers use less Cash use is a function of two things: consumer use and total spending The Cash Paradox Total cash use rises if spending growth exceeds share decline. Share or “Slice” of the pie: Size of the pie: • Consumers’ use of cash to pay as a • Tota
Slide 7: The Cash Paradox in the UK market
The Cash Paradox in the UK market – cash use is in decline but overall cash use increases Cash share is in decline Cash share projected to continue to decline Market dynamics indicate Adjusted share to fall more rapidly X 3 000 GDP (Billion GBP) 2 500 ”Total” pie 2 000 1 500 Total size of pie increa
Slide 8: What market dynamics could alter future cash use over the next decade?
What market dynamics could alter future cash use over the next decade? SEVEN PRIMARY INFLUENCERS Innovators OF CASH USAGE Financial Government institutions Economy Merchants Payment Consumers networks Source: Market Platform Dynamics 87
Slide 9: The longer it takes for mobile innovation to become ubiquitous, the longer it will take for the slice to become impacted
The longer it takes for mobile innovation to become ubiquitous, the longer it will take for the ‖slice‖ to become impacted Even when younger generations change their behaviors dramatically, it takes 30 years to reach a 50% reduction in cash usage by the largest spending group. 88
Slide 10: The Cash Risk Score tells us if we need to adjust the projection
The Cash Risk ScoreTM tells us if we need to adjust the projection Adjusted Future Future Projections of Cash Usage The Cash Risk ScoreTM Projections of based on Cash Usage historical trends based on Cash Risk ScoreTM Seven influencers 34 factors e.g. • Government • Smartphone • Economy penetration
Slide 11: Future total cash use will be determined more by economic growth than by new payment technology
Future total cash use will be determined more by economic growth rather than by new payment technology Real GDP Cash use 1.3% CAGR* (*) Deflated 90