The global banknote printing market is set for steady expansion across the next five years according to exclusive data from Anti-Counterfeit & Currency Expo media partner, Smithers Pira.
Worth $9.7 billion in 2018 this business of printing money will increase at a compound annual growth rate (CAGR) of 2.7% to reach $11.1 billion in 2023. This impression of stasis belies profound changes underway in the industry – its commercial composition, technology demanded and geographic distribution.
The US is the third largest national market for banknotes; but the number it has printed in the US has declined over the last several years. From a peak of almost 8.4 billion notes in 2012, it has stabilised in the last couple of years in the low 7 billion range. The Federal Reserve’s order for 2018 was 7.4 billion with a total face value of $233.3 billion.
For 2018–2023, the US is forecast to be one of the major countries to experience displacement of cash by electronic payment methods. This is attributable to a combination of unabated e-commerce growth; higher spending by younger tech savvy, less cash loyal consumers; and rapid growth of the infrastructure base for alternative payment methods like Apple Pay and PayPal.
Smithers’ analysis shows this trend is mirrored in other most developed nations – such as members of the EU and Japan – although it is not uniform. This situation is placing pressure, not only on state print works but also commercial banknote printing firms.
The sole supplier of cotton paper used in US banknotes – was sold to new owners for $800 million.
This has led to significant disruption of the commercial landscape across the past two years. In January 2018 Massachusetts-headquartered Crane Currency – the sole supplier of cotton paper used in US banknotes – was sold to new owners for $800 million. It has realigned its business, for example closing its plant in Sweden, and opening a new $100 million facility on Malta.
Further afield UK-based De La Rue spun-off its paper business to become Portals De La Rue in February; Sun Chemical has acquired Luminescence to give it a new position in the security inks segment; and Netherlands-based Joh Enschede has ceased production.
The general trend is that private banknote printers – and the contracting arms of state enterprises – are chasing fewer more lucrative contracts; looking to offer more comprehensive services and actively pursuing opportunities in developing markets where demand for cash is still rising. South America, Central America and Africa will present the key regions with expanding demand for the further according to the Smithers Pira report – The Future of Banknotes to 2023.
Latin America presents a logical extension to printers and technology suppliers in North America. Brazil is now the fourth largest market by volume (notes printed) following the US in third place. The total available market here will be just under 15 billion notes in 2018, which is predicted to rise to over 16.4 billion notes by 2023 – with demand especially strong for new diffractive optically variable image devices (DOVIDS).
John Nelson, Commissioning Editor – Security Print at Smithers will be speaking on the 'Global Outlook: Banknotes & Security Printing Trends' session, taking place on Wednesday, November 7, 2018 at the Anti-Counterfeit & Currency Conference.
To hear John speak, register online for your FREE delegate pass.