New challenges for banknote printing in the Americas

New challenges for banknote printing in the Americas

Smithers looks at how the banknote printing industry in the Americas is faring against the wide range of new payment technologies on offer.

The global market for banknote printing is forecast to increase from $9.7 billion in 2018 to $11.1 billion in 2023, according to a new report - The Future of Banknotes to 2023 - from Smithers.

This is equivalent to a year-on-year increase of 2.7%, but as the market it growing it is evolving it is reflecting an industry undergoing restructuring and competition from alternative payment solutions. Africa is forecast to grow by 4.5%, but all other regions will drop below 3%, most noticeably North America with a negative growth rate at -0.9%. By contrast the South & Central American market will expand at a rate of 2.8%. 

In terms of volume of banknotes printed, the US is third largest manufacturer, behind China and India. It will retain this position over the next five years, although annual production will decline from around 7 billion notes to 6.4 billion. This is principally due to the displacement of cash by electronic payment methods. Growth rates remain positive in Canada, though these have declined since a peak at the beginning of the decade when Ottawa became the first major economy to switch over to polymer substrate notes.

Graph US dollar annual production per denomination 2013 to 2023

For commercial banknote printers, South & Central America presents a key market opportunity. With a large population, Brazil is already the fourth largest national market. Furthermore several key growth countries in the region Colombia, Peru, Chile, Bolivia and Venezuela do not have a state print works for banknotes.

The total available market was just under 15 billion notes in 2018, which is predicted to rise to exceed 16.4 billion notes by 2023.

In terms of volume demand for commercial work, the largest markets are:

  • Colombia at 1.2 billion notes
  • Bolivia at 400 million notes
  • Chile at 382 million notes
  • Guatemala at 357 million notes.

Venezuela in particular is having to print multiple note iterations as it battles to manage hyperinflation running at around 12,800% (Forbes, May 2018). This represents an overspill market has been worth, on average, some one billion banknotes per year, but this is an unsustainable situation. 

Further analysis on the trends shaping the evolution of the banknote printing market, commercial opportunities and exclusive market data is available in the Smithers market report The Future of Banknotes to 2023

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