World's largest banknote printer says printing money isn't profitable anymore(businessinsider.com)
businessinsider.com
World's largest banknote printer says printing money isn't profitable anymore
https://www.businessinsider.com/world-largest-banknote-printer-de-la-rue-issues-profit-warning-2023-4
51 comments
The caption is “The world's largest banknote printer says printing money isn't that profitable anymore”, the missing “that” is kinda relevant.
Wow, Yes HN headline is definetly false.
Dang, can we get an updated title for this submission?
Central banks snapped up banknotes during the pandemic, but they are now working through the stockpile before acquiring new stocks, De La Rue said in November 2022. Demand for banknotes has also been depressed due to government finances being squeezed by inflation, the cost-of-living crisis, and access to foreign exchange in some cases.
I'm in the UK. I hardly ever use hard cash now, preferring contactless (or minimum, chip&pin). The dodgy window cleaner and pub quiz charity donations are my only regular cash uses these days.
I wonder what % of the drop in demand comes from that.
I'm in the UK. I hardly ever use hard cash now, preferring contactless (or minimum, chip&pin). The dodgy window cleaner and pub quiz charity donations are my only regular cash uses these days.
I wonder what % of the drop in demand comes from that.
Similar story here... I've handled cash exactly three times this year so far and its always been money for a birthday card.
I don't even know the pin to three of my four cards. Tap and go is just so, so good.
The only thing i really want is a Venmo-style app for transferring small amounts between friends but nothing i've found so far is that wide spread, I assume because our app banking is pretty advanced.
Edit: Apparently PAYM died last month, disregard my final sentence.
I don't even know the pin to three of my four cards. Tap and go is just so, so good.
The only thing i really want is a Venmo-style app for transferring small amounts between friends but nothing i've found so far is that wide spread, I assume because our app banking is pretty advanced.
Edit: Apparently PAYM died last month, disregard my final sentence.
I'm in the UK as well and the last pub quiz I've been to, they had a card reader for the charity donations. You also see street buskers regularly using them too, so I think it's slowly becoming over for cash, except for maybe drug dealers?
What is the reason we still use physical money?
For me, it is that I don't like all my purchases to be tracked in one giant database.
If you still use cash, what are your reasons?
For me, it is that I don't like all my purchases to be tracked in one giant database.
If you still use cash, what are your reasons?
I don’t trust that the infrastructure will always work.
I’ve had my cards rejected randomly. Since I travel a lot and mainly use cards abroad, I’ve had my cards rejected more times than not. It’s pretty troublesome to be stranded somewhere and unable to get a hotel or ride a train because your card was rejected.
I always keep a fat wad of cash for that reason. Also that at any time my bank could be shut down, governments or banks could decide I don’t have a right to buy something, power outages could render payments useless, or hackers could easily take down a network if they were motivated (and state-level actors have plenty of motivation now).
I’ve had my cards rejected randomly. Since I travel a lot and mainly use cards abroad, I’ve had my cards rejected more times than not. It’s pretty troublesome to be stranded somewhere and unable to get a hotel or ride a train because your card was rejected.
I always keep a fat wad of cash for that reason. Also that at any time my bank could be shut down, governments or banks could decide I don’t have a right to buy something, power outages could render payments useless, or hackers could easily take down a network if they were motivated (and state-level actors have plenty of motivation now).
This is mostly my reason too. Using payments networks makes you beholden to somebody else and reliant on their systems working properly. But nobody selling you stuff gives a shit about that, if it doesn't work, it's your fault. So it's better to take responsibility and keep cash and not be stuck because of other people's problems.
Concretely, I went across town last year with my wife to try a popular counter-service restaurant. Their payment system wasn't working, and during the time I paid for and waited for my order, they turned away about 10 other people who didn't have cash to pay.
Concretely, I went across town last year with my wife to try a popular counter-service restaurant. Their payment system wasn't working, and during the time I paid for and waited for my order, they turned away about 10 other people who didn't have cash to pay.
I generally just keep multiple cards from multiple providers. I have a Visa, MasterCard, and Amex, no two from the same bank. I even have a card from a foreign bank. This doesn't solve problems with local infrastructure (e.g., vendor's payment system is down), but it does solve most other issues.
Cash is important to preserve freedom.
Otherwise the centralized digital currency road someday leads to a bureaucrat locking your account because you wrongthinked.
You can already catch glimpses of this with payment processors refusing to do business with people they disagree with ideologically.
Otherwise the centralized digital currency road someday leads to a bureaucrat locking your account because you wrongthinked.
You can already catch glimpses of this with payment processors refusing to do business with people they disagree with ideologically.
Well, if I want to give a casual acquaintance 10 bucks, it is still faster to reach into my wallet and pull out a piece of paper than it is to get their Venmo or Paypal information.
And not everyone has access to Venmo. Anyone under the age of 18 can't legally use Venmo.
There are plenty of legit uses for paper currency.
And not everyone has access to Venmo. Anyone under the age of 18 can't legally use Venmo.
There are plenty of legit uses for paper currency.
I only ever use cash for everything, mostly because:
1. it's simple to stick to a budget, I withdraw every week x$ and don't allow myself to withdraw until the next one. Compared to the tap tap everywhere, there's no surprise, it's very predictable and never over budget. Yes, you could use an app but I don't carry a phone everywhere so it wouldn't work for me
2. I don't like hard to read bank statement full of stuff I don't care about. For all those things, I only pay cash (aka 95% of the time) so whenever I pull a bank statement, it's very easy to read with very few lines each month that only has the things I care about and I really like that simplicity
3. I don't like the idea of credit card companies triple charging for what I see being a useless service, taking a cut from my fees, another cut from the vendor and because that's not enough another cut by selling that data, that alone is enough to get me out. Maybe some credit card companies don't resell their data but I have other things to do than reading their term of service when cash work great for me
1. it's simple to stick to a budget, I withdraw every week x$ and don't allow myself to withdraw until the next one. Compared to the tap tap everywhere, there's no surprise, it's very predictable and never over budget. Yes, you could use an app but I don't carry a phone everywhere so it wouldn't work for me
2. I don't like hard to read bank statement full of stuff I don't care about. For all those things, I only pay cash (aka 95% of the time) so whenever I pull a bank statement, it's very easy to read with very few lines each month that only has the things I care about and I really like that simplicity
3. I don't like the idea of credit card companies triple charging for what I see being a useless service, taking a cut from my fees, another cut from the vendor and because that's not enough another cut by selling that data, that alone is enough to get me out. Maybe some credit card companies don't resell their data but I have other things to do than reading their term of service when cash work great for me
> If you still use cash, what are your reasons
Not me personally, but in the UK, postal orders [0] are still a thing because they let you walk into a post office, hand over some cash and get a token that you can give to a named recipient, who can then themselves walk into a post office and obtain the specified amount of cash. This lets you relatively safely exchange money without either party possessing a bank account. They are still accepted by some govt institutions so as not to discriminate people without bank accounts. When I was a kid they were used to snail-mail birthday-present money.
[0] https://en.wikipedia.org/wiki/Postal_order
Not me personally, but in the UK, postal orders [0] are still a thing because they let you walk into a post office, hand over some cash and get a token that you can give to a named recipient, who can then themselves walk into a post office and obtain the specified amount of cash. This lets you relatively safely exchange money without either party possessing a bank account. They are still accepted by some govt institutions so as not to discriminate people without bank accounts. When I was a kid they were used to snail-mail birthday-present money.
[0] https://en.wikipedia.org/wiki/Postal_order
> For me, it is that I don't like all my purchases to be tracked in one giant database.
That is one big reason, yes. A very important one.
Aside from that, cash is optimal in terms of dependencies. Namely, a cash transacion is solely between the only two parties that are relevant to the transaction, the buyer and the seller. Nothing can interfere or stop the payment if the buyer and seller agree if they use cash.
All other payment types introduce third parties into the mix, all of whom can now block the transaction. So it adds risk.
And the newer electronic payment types (like paypal, venmo etc, as opposed to credit cards) are even more sketchy. As HN knows from tons of submissions, they will not only block you on a whim but also steal any and all previous money you may have received. I'll never use any of those, the risk is way too high.
Finally, there is also infrastructure risk. Even if the payment processor isn't trying to block your transaction or steal your money, the payment is dependent on all the infrastructure working correctly (server, their internet, your internet, your phone in many cases, etc). If anything is down, suddenly you can't pay anymore. While not super common, it is nonetheless relatively frequent around here to walk into a small shop where they have a sign saying "our internet is down, cash only today". So important to always have cash handy.
The credit card cashback and buyer protections are attractive admittedly, so I end up using credit cards for anything larger but try to generally always use cash for anything under $100 for all the benefits of cash.
As any engineer knows, every additional moving part dependency you add to a system also adds risk of failure. Cash has zero external dependencies so it is optimally resilient.
That is one big reason, yes. A very important one.
Aside from that, cash is optimal in terms of dependencies. Namely, a cash transacion is solely between the only two parties that are relevant to the transaction, the buyer and the seller. Nothing can interfere or stop the payment if the buyer and seller agree if they use cash.
All other payment types introduce third parties into the mix, all of whom can now block the transaction. So it adds risk.
And the newer electronic payment types (like paypal, venmo etc, as opposed to credit cards) are even more sketchy. As HN knows from tons of submissions, they will not only block you on a whim but also steal any and all previous money you may have received. I'll never use any of those, the risk is way too high.
Finally, there is also infrastructure risk. Even if the payment processor isn't trying to block your transaction or steal your money, the payment is dependent on all the infrastructure working correctly (server, their internet, your internet, your phone in many cases, etc). If anything is down, suddenly you can't pay anymore. While not super common, it is nonetheless relatively frequent around here to walk into a small shop where they have a sign saying "our internet is down, cash only today". So important to always have cash handy.
The credit card cashback and buyer protections are attractive admittedly, so I end up using credit cards for anything larger but try to generally always use cash for anything under $100 for all the benefits of cash.
As any engineer knows, every additional moving part dependency you add to a system also adds risk of failure. Cash has zero external dependencies so it is optimally resilient.
With cash, I like that the vendor keeps 100% of the money instead of giving a ~3% tithe to the big financial companies. I also don't want every financial transaction to be required to be tracked by big companies. While >99% of my purchases I don't care if are tracked, I like the option being available, so I use cash to keep it a viable method.
I think about it more as - why would I use a card?
There are multiple middlemen involved in any transaction, value is extracted _and_ data
Everything I do is linked to my identity
The lack of physical interaction more easily results in overspending
I can't actually pay a person unless they invest in hardware (which 99.99% of people do not have), cards produce a hierarchy of "businesses" and "consumers"
There are multiple middlemen involved in any transaction, value is extracted _and_ data
Everything I do is linked to my identity
The lack of physical interaction more easily results in overspending
I can't actually pay a person unless they invest in hardware (which 99.99% of people do not have), cards produce a hierarchy of "businesses" and "consumers"
My bank assets could be arrested any moment and they were arrested multiple times in the past. My cash paper could not.
I'm using cards for small payments because of convenience, but there's no way I'd ever trust all my money to bank.
I'm using cards for small payments because of convenience, but there's no way I'd ever trust all my money to bank.
I try (don't always succeed) to always have some cash with me when I go out, for "unforseen emergency" situations. I've been happy to do so a few times in my life so it's a good habit.
But, for daily use? I only use it for Kijiji/Facebook Marketplace purchases, that's pretty much it. I don't even use it for charity these days, most will have an online option.
I agree 101% in principle with the notion of less trackable (not untrackable) method of payment, but now that I have kids and work and mortgage and so on, I must admit that on a daily basis, convenience wins :-/
But, for daily use? I only use it for Kijiji/Facebook Marketplace purchases, that's pretty much it. I don't even use it for charity these days, most will have an online option.
I agree 101% in principle with the notion of less trackable (not untrackable) method of payment, but now that I have kids and work and mortgage and so on, I must admit that on a daily basis, convenience wins :-/
Mostly...my kids, and tips. My kids randomly ask for money and sometimes my wife and I randomly ask them to pick something up from the store on the way home from school. Having cash on hand is uniquely convenient.
I also tip heavy and I want that money to go directly to the worker. I don't care if they pocket it right then and there. If I appreciate the service they gave and want to reward them directly without having a faceless manager or company take a cut, cash is the best way to do it.
Gotta keep my doordash buddies happy!
I also tip heavy and I want that money to go directly to the worker. I don't care if they pocket it right then and there. If I appreciate the service they gave and want to reward them directly without having a faceless manager or company take a cut, cash is the best way to do it.
Gotta keep my doordash buddies happy!
I use cash to do my part to slow down its disappearance. I like the fact that it is difficult for central powers to control, and its existence means that people can more easily live off the grid. I like the ability to hand someone a tip without accessing the Internet. At the same time, I think the Bitcoin Lightning Network is pretty cool. I guess I like options.
I like to leave cash tips whenever possible, in the hopes that the tip receiver will not pay tax on it.
Regardless, tax is their business. It's not my place to all but make the decision for them.
For me, nearly all of my cash transactions over the last 5-6 years have been when I don't have a choice, mainly either trips to places where credit cards aren't as widely used, or cannabis purchases.
aside from the privacy thing and practical use, cash does have the following major advantage/function:
It's the one thing that stands in the way of governments (or supranational unions) pushing negative interest rates or even harder means to surreptitiously or openly disown citizens via the money itself e.g. as an easy way to reduce the state debt in times of state debt crisis.
Of course there are other ways for states to do that (e.g. inflation)… but those come with much bigger other problems and obstacles for any politician who would want to use them.
It's the one thing that stands in the way of governments (or supranational unions) pushing negative interest rates or even harder means to surreptitiously or openly disown citizens via the money itself e.g. as an easy way to reduce the state debt in times of state debt crisis.
Of course there are other ways for states to do that (e.g. inflation)… but those come with much bigger other problems and obstacles for any politician who would want to use them.
Purely the existence of an alternative is a must, without it people would be not so happy with the e-money, eg. transatcion fees would became enermous..
It works offline.
It works as a legal tender for minors that don't have a bank account yet.
Often a contractor/landscaper will give a nice discount (like 10%) if you pay them in cash. I assume they’re avoiding taxes but it’s none of my business.
I ask for cash discounts all the time and it’s crazy how often you’ll get one, my doctor even gave me one!
Not sure it’s always tax avoidance, in my doctors case I just assume some portion covered the credit card fee, and some portion covered some reduced paperwork burden.
Not sure it’s always tax avoidance, in my doctors case I just assume some portion covered the credit card fee, and some portion covered some reduced paperwork burden.
If it's like a 3% discount it's probably a credit card fee they are discounting. 10% though is well more.
> Often a contractor/landscaper will give a nice discount (like 10%) if you pay them in cash. I assume they’re avoiding taxes but it’s none of my business.
In comparison to what ?
In comparison to bank transfer, then yes, maybe there's "funny business" going on.
In comparison to card payment, then probably not.
The "problem" with card payments from a small business perspective is three-fold:
Yes you could say cash is technically irrevocable too, but it comes with other risks for the small business (counterfeit notes, employees taking from the till etc.etc.)
In comparison to what ?
In comparison to bank transfer, then yes, maybe there's "funny business" going on.
In comparison to card payment, then probably not.
The "problem" with card payments from a small business perspective is three-fold:
1. You take a cashflow hit. Card companies typically sit on the cash for 5–7 days before allowing you to withdraw.
2. You take a fees hit, typically 1–2%, but AMEX are famous about charging more ! And that's just the transaction fee, if you are dealing with currency conversion then add a few percent extra...
3. The fraud risk (you do the job, someone pays on a card ... few weeks later, the card company claws the money back from you because either it wasn't their card or they did a fraudulent chargeback)
Yes you could say cash is technically irrevocable too, but it comes with other risks for the small business (counterfeit notes, employees taking from the till etc.etc.)
Almost none of the contractors near me take credit cards. If it was a 3% discount then yes, I'd agree they are discounting that off. They generally want personal checks. Where I live there isn't an assumed risk of fraud or lack of funds so a personal check is a guarantee.
I should be careful about saying "often". In my experience it has been something that contractors I've done work with numerous times might throw my way as a way for me to pay less and for them to accomplish whatever goal they have. For all I know they want cash so they can run to the casino.
I should be careful about saying "often". In my experience it has been something that contractors I've done work with numerous times might throw my way as a way for me to pay less and for them to accomplish whatever goal they have. For all I know they want cash so they can run to the casino.
Tax "optimization" maybe? Idk
It is a way to avoid paying fees on every single transaction, and keeps your purchases from being tracked.
1. tips
2. poker
3. back up in case of emergency
2. poker
3. back up in case of emergency
I used to work for a large company in this space.
During the pandemic they gutted the new digital cash R&D division because physical cash was booming and they didn’t want their customers to switch to digital cash and spoil the gravy train… oops I guess
During the pandemic they gutted the new digital cash R&D division because physical cash was booming and they didn’t want their customers to switch to digital cash and spoil the gravy train… oops I guess
> During the pandemic they gutted the new digital cash R&D division because physical cash was booming and they didn’t want their customers to switch to digital cash and spoil the gravy train… oops I guess
I'm surprised that the pandemic caused physical cash to boom, given it's the most germ-prone way to make a payment. Personally I recall seeing a lot more adoption of contactless credit card payments at that time.
I'm surprised that the pandemic caused physical cash to boom, given it's the most germ-prone way to make a payment. Personally I recall seeing a lot more adoption of contactless credit card payments at that time.
I'm willing to bet that people feeling like they're on the precipice of a civilization ending event and the massive uptick in authoritarian rhetoric and action probably had something to do with that.
I suppose, but that's kind of sloppy thinking. After a "a civilization ending event" cash will only remain useful for a little while, until the survivors realize civilization's ended.
I'm reminded of that scene from The Road where they walk over a pile of cash and jewelry like it was nothing: https://youtu.be/WEP25kPtQCQ?t=118.
I'm reminded of that scene from The Road where they walk over a pile of cash and jewelry like it was nothing: https://youtu.be/WEP25kPtQCQ?t=118.
This is baffling to me. In my experience, during the pandemic, everyone switched away from using cash, even if they had been using it previously. Most places even stopped taking cash tips.
I think it was a mix of a few governments wanting to refresh their currency coincidentally and central banks printing money (a lot of QE is in fact physical cash!!
Magic beans R&D.
Don't give up on cash, no matter how inconvenient you think it is. Fiercely defend its continued existence.
It's a last line of defense against financial tyranny, where an institute with the push of a button can confiscate, block/ban the money of millions. Can't do that with cash, you have to go home by home.
I've read that about 60% of the world's population lives in an authoritarian regime, and for the rest it's quite unsure if your rights and freedoms will last forever. So the risk is hardly a conspiracy theory.
It's a last line of defense against financial tyranny, where an institute with the push of a button can confiscate, block/ban the money of millions. Can't do that with cash, you have to go home by home.
I've read that about 60% of the world's population lives in an authoritarian regime, and for the rest it's quite unsure if your rights and freedoms will last forever. So the risk is hardly a conspiracy theory.
On the upside, De La Rue expects revenues from its authentication division to exceed £100 million for the first time in the coming fiscal year. This is in part driven by demand for Australian passports, for which De La Rue is a supplier, according to the Wednesday filing.
Australian passports ... damn pricey. Something like AUD$325 per passport[0] and IIRC they no longer let you ask for extra pages either. And while Australia has a low population by global standards, we are big travelers. A new government was just voted in - perhaps time to renegotiate with De La Rue and get a better deal?
[0] https://www.sbs.com.au/news/article/australian-passport-pric...
Australian passports ... damn pricey. Something like AUD$325 per passport[0] and IIRC they no longer let you ask for extra pages either. And while Australia has a low population by global standards, we are big travelers. A new government was just voted in - perhaps time to renegotiate with De La Rue and get a better deal?
[0] https://www.sbs.com.au/news/article/australian-passport-pric...
From the article.
>The company now expects its full-year adjusted operating profit for the 2024 fiscal year to be around low-20 million, or $25 million, half of its previous unadjusted estimates of 40.1 million, according to Refinitv data seen by Insider.
>"The challenge at the moment is that there simply isn't quite the demand there to be where we want to be, which is disappointing," Clive Vacher, the CEO of De La Rue, told Reuters on Wednesday.
It's still profitable, just not as profitable as it used to be.
>The company now expects its full-year adjusted operating profit for the 2024 fiscal year to be around low-20 million, or $25 million, half of its previous unadjusted estimates of 40.1 million, according to Refinitv data seen by Insider.
>"The challenge at the moment is that there simply isn't quite the demand there to be where we want to be, which is disappointing," Clive Vacher, the CEO of De La Rue, told Reuters on Wednesday.
It's still profitable, just not as profitable as it used to be.
De La Rue also printed (maybe they still do?) the Microsoft COAs (certificate of authenticity stickers) which have many of the same security features as currency.
If even literally printing money isn't profitable, no wonder people are struggling.
Ah, yes, the tendency of the rate of profit to fall
But surely it's a license to print money?