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World's largest banknote printer says printing money isn't profitable anymore

26 points by marban 4y ago

wuiheerfoj 4y ago
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
- mkehrt 4y ago
  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.
  - wuiheerfoj 4y ago
    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!!
- sdfghswe 4y ago
  Magic beans R&D.
- tivert 4y ago
  > 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.
  - racnid 4y ago
    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.
    - tivert 4y ago
      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 https://youtu.be/WEP25kPtQCQ?t=118.
cwillu 4y ago
The caption is “The world's largest banknote printer says printing money isn't that profitable anymore”, the missing “that” is kinda relevant.
- Closi 4y ago
  Wow, Yes HN headline is definetly false.
- reportingsjr 4y ago
  Dang, can we get an updated title for this submission?
mg 4y ago
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?
- andrewclunn 4y ago
  It is a way to avoid paying fees on every single transaction, and keeps your purchases from being tracked.
- seb1204 4y ago
  It works offline. It works as a legal tender for minors that don't have a bank account yet.
- deweller 4y ago
  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.
- pigsty 4y ago
  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).
  - version_five 4y ago
    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.
patja 4y ago
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.
sdfghswe 4y ago
If even literally printing money isn't profitable, no wonder people are struggling.
kitd 4y ago
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.
- enlyth 4y ago
  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?
- swarnie 4y ago
  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.
contingencies 4y ago
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-prices-have-increased-why-do-they-cost-so-much/qhupwzbqu https://www.sbs.com.au/news/article/australian-passport-pric...
swader999 4y ago
I use cash to tip.
- Y_Y 4y ago
  If cash disappears then at least the silver lining might be taking tipping culture with it.
gadders 4y ago
But surely it's a license to print money?
robobro 4y ago
Ah, yes, the tendency of the rate of profit to fall
dahwolf 4y ago
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.
Cipater 4y ago
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.

26 points by marban 4y ago

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

mkehrt 4y ago
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.
- wuiheerfoj 4y ago
  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!!
sdfghswe 4y ago
Magic beans R&D.
tivert 4y ago
> 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.
- racnid 4y ago
  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.
  - tivert 4y ago
    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 https://youtu.be/WEP25kPtQCQ?t=118.

cwillu 4y ago

The caption is “The world's largest banknote printer says printing money isn't that profitable anymore”, the missing “that” is kinda relevant.

Closi 4y ago
Wow, Yes HN headline is definetly false.
reportingsjr 4y ago
Dang, can we get an updated title for this submission?

mg 4y ago

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?

andrewclunn 4y ago
It is a way to avoid paying fees on every single transaction, and keeps your purchases from being tracked.
seb1204 4y ago
It works offline. It works as a legal tender for minors that don't have a bank account yet.
deweller 4y ago
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.
pigsty 4y ago
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).
- version_five 4y ago
  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.

patja 4y ago

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.

sdfghswe 4y ago

If even literally printing money isn't profitable, no wonder people are struggling.

kitd 4y ago

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.

enlyth 4y ago
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?
swarnie 4y ago
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.

contingencies 4y ago

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-prices-have-increased-why-do-they-cost-so-much/qhupwzbqu https://www.sbs.com.au/news/article/australian-passport-pric...

swader999 4y ago

I use cash to tip.

Y_Y 4y ago
If cash disappears then at least the silver lining might be taking tipping culture with it.

gadders 4y ago

But surely it's a license to print money?

robobro 4y ago

Ah, yes, the tendency of the rate of profit to fall

dahwolf 4y ago

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.

Cipater 4y ago

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.