The recent announcement by Vancouver-based Fortress Paper to increase the printing capacity at their European mills (read “Fortress Paper announces approval of initial financing facility for PM1 rebuild”) reiterates the reality that even in a digital age the need for banknotes continues to increase worldwide.

Though credit cards, online banking and debit cards seem to be maintaining an edge over cold hard cash, many agree this is a common misconception.

A trial-run move to debit only in Uzbekistan has demonstrated major problems in a digital-only scenario (read “Uzbekistan debit woes highlight continual need for banknotes”) and late last year British business leaders issued a public demand for more banknotes to be printed (read “British business leaders demand more ten dollar banknotes”).

Chad Wasilenkoff, President and CEO of Fortress Paper, agrees that the global demand for banknotes is always increasing.

“Banknotes continue, in all countries that we know of, to require more banknotes on an annual basis,” he says in this video.

The upgrades to their PM1 printing machine will allow Fortress Paper to print more banknotes at their European facilities. The upgraded machine will increase production capacity from the current 2,500 tonnes per year to approximately 10,000 tonnes per year.

In addition to printing banknotes, Fortress Paper also prints various other security and specialty papers for items such as visas and passports.

SOURCES:
YouTube: “Fortress Paper CEO Chad Wasilenkoff Speaks about the Solid Demand for Banknotes”
“Fortress Paper announces approval of initial financing facility for PM1 rebuild”

Debit cards have placed banks, like this one in Tashkent, between the people and their money. Courtesy Radio Free Europe Radio Liberty.

A move to reduce the amount of banknotes used in everyday transactions in Uzbekistan has hit some rather large setbacks, at times leaving people with no cash in hand at all.

The central-Asian country recently launched a campaign to push the use of debit cards as a more convenient way of conducting transactions, with the government saying the move would help bring everyday transactions into the digital age.

Under the program – which is only a month old – citizens were to be paid via electronic deposits, and encouraged to use debit cards for transactions for any/all methods of payment. The program would also allow citizens to conduct traditional bank transactions like withdrawals should they need to.

But some citizens say getting their hands on cold hard cash isn’t easy at all and are feeling the pangs of the banknote experiment.

“When we go to banks, they won’t give us any money because they say they don’t have cash,” says Gulbahor, a teacher from the eastern town of Syrdarya “And many shops don’t accept cards and tell us, ‘We trade only with cash.’”

This Catch 22 – not having access to banknotes, but having to use only banknotes in some markets – is causing a major problem for Uzbek middle-class citizens.

Debit cards were introduced in Uzbekistan in the 1990s, and were mainly adopted by the wealthy classes. Recently, Uzbek authorities have promoted the cards by ordering supermarkets, restaurants, hotels and gas stations to install electronic terminals. The terminals, however, are absent from bazaars and markets where most citizens would conduct their daily business.

Gulbahor says that the only way she can get her hands on banknotes is through money-changers who have equipped themselves with debit-card terminals, but the cost of such a transaction is high.

The belief that banknotes are a thing of the past is a common misconception. Though consumers are moving forward into a more digital age, the demand for banknotes worldwide is actually increasing (read: Worldwide Banknote Demand Is Increasing)

Last year, for example, British business leaders, urged the Bank of England to producer more ten pound banknotes (read: British Business Leaders Demand More Ten Pound Banknotes).

A recent report by Research and Markets, the world’s largest market research resource, also highlighted the continual demand for paper banknotes around the globe.

SOURCES:
Radio Free Europe, Radio Liberty: “Debit Cards Costly, At Least For Some Uzbeks”
Research and Markets: “Worldwide Banknote Industry Research Report”