Global Banknote Industry: An Analysis
Banknote industry is an integral part of an economy and the monetary policies of each country. As proved by the EURO, a currency can drive economic stability and economic and monetary integration within a region. Trying to replicate the monetary union of the Eurozone, ASEAN plus three countries, China, Japan and Korea are working towards bringing a common currency for East Asia.
The banknote industry and especially the production of banknotes used to be a very secretive and protected system. But with the gradual opening up of the industry and private players contributing in the production system, the industry has slightly moved away from its secretive stance. However, the participation of private paper mills is still very small as compared to the state owned mills. The banks are now outsourcing a large part of the distribution and recycling of cash to the private companies, cash-in-transit or professional cash handlers or sub-contractors. In fact, in 2012 the Euro production system is going to open up for the private players completely, providing a level playing field.
Apart from the competition within the private mills for contracts from the central banks, the industry itself is facing a tough competition from the payment cards industry. The growth payment cards are registering is attractive, although its country or region specific, but people are shifting towards non-cash based payments and in most countries this is even being encouraged.
The cash distribution system as well as banknote production system is complex. The base of banknotes is cotton and the process is quite lengthy and complex. The cotton used for banknotes is also different from the cotton fiber used by the textile industry. Then there are various security features which are embedded on the substrate used for banknotes.
But the efforts to make the banknote secure are not proving very fruitful as the problem of counterfeiting is growing globally. Therefore many countries have now adopted polymer banknotes. These polymer banknotes are said to be more secure, as many more security features can be added into it and it is also much more difficult to be forged.
This report analyzes the banknote industry from different perspectives. The report has tried to explain the various aspects involved in the production of banknotes and the cash distribution system. The system for issue of currencies and for monitoring the money flow in different countries has been explained. The various security features that are used to make a banknote secure are also discussed.
The banknote industry and especially the production of banknotes used to be a very secretive and protected system. But with the gradual opening up of the industry and private players contributing in the production system, the industry has slightly moved away from its secretive stance. However, the participation of private paper mills is still very small as compared to the state owned mills. The banks are now outsourcing a large part of the distribution and recycling of cash to the private companies, cash-in-transit or professional cash handlers or sub-contractors. In fact, in 2012 the Euro production system is going to open up for the private players completely, providing a level playing field.
Apart from the competition within the private mills for contracts from the central banks, the industry itself is facing a tough competition from the payment cards industry. The growth payment cards are registering is attractive, although its country or region specific, but people are shifting towards non-cash based payments and in most countries this is even being encouraged.
The cash distribution system as well as banknote production system is complex. The base of banknotes is cotton and the process is quite lengthy and complex. The cotton used for banknotes is also different from the cotton fiber used by the textile industry. Then there are various security features which are embedded on the substrate used for banknotes.
But the efforts to make the banknote secure are not proving very fruitful as the problem of counterfeiting is growing globally. Therefore many countries have now adopted polymer banknotes. These polymer banknotes are said to be more secure, as many more security features can be added into it and it is also much more difficult to be forged.
This report analyzes the banknote industry from different perspectives. The report has tried to explain the various aspects involved in the production of banknotes and the cash distribution system. The system for issue of currencies and for monitoring the money flow in different countries has been explained. The various security features that are used to make a banknote secure are also discussed.
1. BANKNOTES - OVERVIEW
1.1 Paper Banknote Production & Life Cycle
1.2 Paper Banknote Production Chain
1.3 Polymer Banknote Production Chain
1.2 Cash Distribution Cycle
2. BANKNOTE INDUSTRY OVERVIEW AND FACTS
2.1 Selected European Banknote Industry Participants by Segment
2.2 Security Features
2.2.1 Widely Used Security Features
2.2.2 Raw Material - Paper
3. GROWING COUNTERFEITING & USE OF POLYMER NOTES
3.1 Counterfeiting Issue
3.1.1 European Central Bank (ECB)
3.1.2 Bank of Canada
3.2 Polymer Banknotes – Deterrent to Counterfeiters
4. GLOBAL PRODUCTION
Banknote Production Volume
5. US BANKNOTE MARKET SIZE
Currency Note Production Volume
Currency Note Production Growth
6. EU BANKNOTE MARKET SIZE
Euro Banknotes in Circulation
Location of Printing Works
Allocation of Euro Production
6.1 UK Banknote Market
Banknote Production by Volume
Banknote Production by Value
7. SWITZERLAND BANKNOTE MARKET
7.1 Banknotes
7.1.1 Swiss Franc Security Features
Swiss Banknote Circulation
Banknote Circulation Value
8. INDUSTRY DEMAND DRIVERS
8.1 Population and Economic growth
8.1.1 Usage of Banknotes
8.1.2 Economic Growth
9. COMPETITION
9.1 Competition Between Printers - EU
9.1.1 Main Competitors
9.2 Cash vs. Cashless
9.1.2 Continued Shift to Card-Based Payments
10. COMPANY PROFILES
10.1 De La Rue
Overview
Business Strategies
Improving productivity through employee contribution
International expansion – a unique way
Attracting Customers through innovation
10.2 Fortress Paper
Overview
Business Strategies
Optimizing value-added production
Improving operating efficiency
Product innovation
Pursuing strategic acquisitions
10.3 Giesecke & Devrient (G&D)
Overview
Significant Developments
Payment Cards contract
Sesames Awards 2008
Prepay SIM Cards to T-Mobile UK Customers
Volume Production of Robust, Hot-laminated Display Cards
10.4 Francois Charles Oberthur Fiduciaire
Overview
LIST OF TABLES
Selected European Banknote Industry Participants by Segment
List of Banknote Printers
Counterfeit EURO banknotes (2003-08)
Denomination-wise Breakdown Counterfeits (2008 first half)
Average Life Span of a Federal Reserve Note by Denomination
Denomination-wise Annual US Currency Notes Production (1980-2007)
Annual US Currency Notes Production Growth (1980-2007)
Euro Banknotes in Circulation (2005-08)
Euro Banknotes Issued by Eurosystem (2005-08)
Euro Banknotes Returned to Eurosystem (2005-08)
Euro Banknotes Net Issuance by Eurosystem (2005-08)
Location of Printing Works Producing Euro Banknotes
Denomination-wise Banknote Production by Bank of England, Volume (2004-08)
Denomination-wise Issue of Banknote by Bank of England, Value (2004-08)
Denomination-wise Issue of Banknote by Bank of England, Million (2004-08)
Denomination-wise Stock of Banknote in Circulation, Value (2004-08)
Denomination-wise Destruction of Banknote by Bank of England, Value (2004-08)
Denomination-wise Destruction of Banknote by Bank of England, Mn (2004-08)
Denomination-wise Monthly Stock of New Banknote, Million of Notes (2004-08)
UK Sales of Security Printing by Printers in Value (2003-07)
Average Swiss Banknote Circulation (2007)
Factors Affecting Growth in Money Supply
Factors & Their Influence on Currency in Circulation
Growth in ATMs, Number & Value of Withdrawals in UK (2002-07)
European Banknote Paper Competitor Description
Ratio Analysis of Francois Charles Oberthur Fiduciaire (2005-07)
Selected European Banknote Industry Participants by Segment
List of Banknote Printers
Counterfeit EURO banknotes (2003-08)
Denomination-wise Breakdown Counterfeits (2008 first half)
Average Life Span of a Federal Reserve Note by Denomination
Denomination-wise Annual US Currency Notes Production (1980-2007)
Annual US Currency Notes Production Growth (1980-2007)
Euro Banknotes in Circulation (2005-08)
Euro Banknotes Issued by Eurosystem (2005-08)
Euro Banknotes Returned to Eurosystem (2005-08)
Euro Banknotes Net Issuance by Eurosystem (2005-08)
Location of Printing Works Producing Euro Banknotes
Denomination-wise Banknote Production by Bank of England, Volume (2004-08)
Denomination-wise Issue of Banknote by Bank of England, Value (2004-08)
Denomination-wise Issue of Banknote by Bank of England, Million (2004-08)
Denomination-wise Stock of Banknote in Circulation, Value (2004-08)
Denomination-wise Destruction of Banknote by Bank of England, Value (2004-08)
Denomination-wise Destruction of Banknote by Bank of England, Mn (2004-08)
Denomination-wise Monthly Stock of New Banknote, Million of Notes (2004-08)
UK Sales of Security Printing by Printers in Value (2003-07)
Average Swiss Banknote Circulation (2007)
Factors Affecting Growth in Money Supply
Factors & Their Influence on Currency in Circulation
Growth in ATMs, Number & Value of Withdrawals in UK (2002-07)
European Banknote Paper Competitor Description
Ratio Analysis of Francois Charles Oberthur Fiduciaire (2005-07)
LIST OF CHARTS
Banknote Life Cycle
Paper Banknote Production Chain
Polymer Banknote Production Chain
Cash Distribution Organization Participants
Currency Distribution Process
Number of Counterfeit Notes Detected per Mn Notes (2000-07)
Counterfeit Banknotes Detected in New Zealand (1997-2006)
Worldwide Banknote Production Volume by Region
Allocation of Euro Production by National Central Bank (2006)
Swiss Banknote Circulation in Value Terms (1907-2007)
Demand Drivers of Banknote Production
Growth in Demand for Cash (1993-2007)
No. of ATMs and CIC growth in Solomon Islands (2001-07)
Mode of Payment for Value under ?10 in UK (2006)
Mode of Payment for Value over ?50 in UK (2006)
Cash to GDP Ratio (1993-2007)
Ratio of Swiss Banknote Circulation & GDP (1907-2007)
Nominal GDP and CIC growth in Solomon Islands (1997-2007)
Payment Volumes Share in US (2006-11E)
Payment Trends in UK by Transaction Volume (1998-2005)
Sales Growth of De La Rue (2004-08)
Sales Growth of Landqart Mill of Fortress Paper (2004-07)
Banknote Life Cycle
Paper Banknote Production Chain
Polymer Banknote Production Chain
Cash Distribution Organization Participants
Currency Distribution Process
Number of Counterfeit Notes Detected per Mn Notes (2000-07)
Counterfeit Banknotes Detected in New Zealand (1997-2006)
Worldwide Banknote Production Volume by Region
Allocation of Euro Production by National Central Bank (2006)
Swiss Banknote Circulation in Value Terms (1907-2007)
Demand Drivers of Banknote Production
Growth in Demand for Cash (1993-2007)
No. of ATMs and CIC growth in Solomon Islands (2001-07)
Mode of Payment for Value under ?10 in UK (2006)
Mode of Payment for Value over ?50 in UK (2006)
Cash to GDP Ratio (1993-2007)
Ratio of Swiss Banknote Circulation & GDP (1907-2007)
Nominal GDP and CIC growth in Solomon Islands (1997-2007)
Payment Volumes Share in US (2006-11E)
Payment Trends in UK by Transaction Volume (1998-2005)
Sales Growth of De La Rue (2004-08)
Sales Growth of Landqart Mill of Fortress Paper (2004-07)
