Payments are an everyday routine matter. The past ten years have brought many changes in the world of payments (Internet, mobile). Instruments have been dematerialised and automated. But what do we understand by means of payment? According to Régis Bouyala, means of payment are “transaction media made available to economic agents [...] to pay the price of a product or service or to settle a debt.”  (1)

There are two main categories: fiduciary currency and bank money. Fiduciary currency is represented by cash, banknotes and coins. Bank money gives rise to an entry in an account via a cheque, transfer or bank card. Bank cards, which appeared in Belgium in the late 1970s, are particularly useful for face-to-face payments because they are easy to use, widely accepted and accompanied by a wide range of services. A third category was created recently, namely electronic money. This in fact corresponds to issuance of the prepaid electronic purse, used for payments which are initiated, processed and received electronically (by means of the chip).

Electronic money is located at the intersection of several spheres: the economy, the banking sector, information technology and networks. The French term ‘monétique’ is a contraction of the words moné(taire) [monetary] and (informa)tique [information technology]. It has been in use since the 1980s. It concerns “all the electronic, IT and telematic techniques which enable transactions and bank transfers to be effected (bank cards, electronic transfers, etc.)”.  (2)

The means of payment most commonly used by the majority of Europeans is the bank card. However, its usage varies greatly from one country to another. In 2007, Europeans effected an average of 55 payments a year by card: for Finns, the figure was 153, for Danes 160 while for Poles it was just over 10. In Europe, 95 % of (national) domestic payments are effected by card. Payments in Benelux are mostly made by debit card (Maestro), while in the United Kingdom it is credit cards (used as deferred debit cards) that are most commonly used.

Launched in 2002, the SEPA (Single Euro Payments Area) project is intended for European payments in bank money, by analogy with the single cash payments area where euros are in circulation. Thirty-one countries are taking part, namely the twenty-seven European Union countries plus Iceland, Norway, Liechtenstein and Switzerland. Cross-border transfers are the most numerous transactions.  Bancontact/Mister Cash are the cards most commonly used for domestic payments.

The first payment cards took the form of a plastic card with embossed inscriptions. Later, computerisation made it possible to equip cards with a magnetic strip. At that time, electronic transactions were processed via the telephone networks. However, security remained a concern. It was addressed by the introduction of cards with an electronic chip. EMV is an international chip card standard launched in 1997 by the international networks Europay, Mastercard and Visa (hence the acronym EMV).

Modern bank cards display various security features, arranged differently depending on the card. In particular, on the front of the card there is the card number (ending in the Luhn algorithm), the IBAN (International Bank Account Number) and the electronic chip. On the back, security features include the magnetic strip and the signature.

Cards offer two services: payments and withdrawals. They are always used in conjunction with an account from which the amounts corresponding to the transactions are debited. The debit card is a magnetic card permitting the immediate debiting of an amount from a bank account. Conversely, credit card payments are not debited to the account until the end of the month.

There are four main players involved in card payments: the card holder, the holder’s bank (often the bank which issued the card), the acceptor (the party receiving the payment) and the acquiring bank (which makes the transactions available to the issuing bank).

In the world of electronic money, there are two types of financial transactions. Domestic transactions are those effected within a country by holders of cards issued by financial institutions in that country. International transactions can be divided into two categories: transactions effected within a country by holders of cards issued by foreign banks, or transactions effected abroad by holders of cards issued by banks of the country of origin. The transactions are then effected between the banks via international networks such as Visa or MasterCard.  

Catherine Dauvister.
Museum guide.

Bibliography:

BOUYALA, Régis, Le monde des paiements, Paris, 2005, Revue Banque Edition, coll. Techniques bancaires.
BOUYALA, Régis, Les paiements à l’heure de l’Europe et de l’e-paiement, Paris, 2009, Revue Banque Edition, coll. Les essentiels de la banque et la finance.
BRYON, Marie et VAN OVERSTRAETEN, Christophe, Des cartes et des terminaux. 25 ans de paiements électroniques en Belgique, Banksys, 2004.
HALLEPEE, Didier, L’univers de la monétique : histoire, fonctionnement et persectives, Paris, 2009, Domptin, coll. Arc-en-Ciel. Economie.
HALLEPEE, Didier, SEPA : l’espace des paiements en euro, Paris, 2009, Domptin, coll. Arc-en-Ciel. Economie.
SHERIF, Mostafa Hashem, Paiements électroniques sécurisés, Paris, 2007, Presse polytechniques et universitaires romandes et GET, coll. Technique et scientifique des télécommunications.

(1) BOUYALA, Régis, Le monde des paiements, Paris, 2005, Revue Banque Edition, coll. Techniques bancaires, p. 21. 

(2) SHERIF, Mostafa Hashem, Paiements électroniques sécurisés, 2007, Presse polytechniques et universitaires romandes et GET, p. 2.

UCB building

Constructed in 1872, the building that housed the former Union du crédit de Bruxelles had not opened its doors to the public for almost 30 years. Defaced, pillaged, damaged by fire …the building was finally rescued and restored by the National Bank, which has now moved its library into the premises. It is open to the public.The National Bank’s restoration of the old UCB building at number 57 de la rue Montagne aux herbes potagères, carried out under the supervision of the Royal Commission for Monuments, Sites and Excavations, is all the more interesting since 19th century bank buildings are so rare. This partially listed building can now be visited again.

It was back in 1872 that architect Désiré De Keyser finished construction work on this bank building, a tall edifice illuminated by two huge windows exuding both lightness and boldness. The building has not been spared its trials and tribulations over the years, however, having undergone many alterations during the course of its history, before benefiting from an extremely meticulous and environmentally-friendly restoration project starting in the mid-2000s.

Its décor is largely inspired by the Gothic style. The combination or iron and glass so typical of that period gives the building an aura of elegance. It adds to the charm of an edifice that today houses the National Bank’s Scientific Library, one of the country’s main sources of economic information, which has recently celebrated 100 years of existence. The restoration job was rounded off by the Bank commissioning a huge mural tapestry from Pieter Vermeersch. To mark the opening of the building, the National Bank is also holding an exhibition of about thirty items from its collection of Belgian contemporary art based on the theme of light: (De)light.

Library of the National Bank of Belgium
57 rue Montagne aux herbes potagères
1000 Brussels

Open from Monday to Friday 10 a.m. to 5 p.m.

Possibility for a guided tour upon request (2.50 EUR per person): 
art@nbb.be
02 221 40 89

Watch the video about the renovation

labour market

Whether here in Belgium or in many other countries around the world, the state of the labour market and how it is developing is a highly topical subject. The National Bank’s third seminar for secondary-school Economics teachers scheduled for this October will enable participants to get a general overview of the Belgian labour market, its functioning and its various stakeholders.

The seminar will clarify the meaning of concepts such as the employment and unemployment rates, the Lisbon strategy targets, the wage norm, etc., and will explain how they are calculated. The approach followed will be based on the use of real-life examples, such as the impact of the recession on the labour market, the integration of young people into the world of work and the shock of an ageing population. All this will be backed up by quantified illustrations, putting the emphasis on the Belgian labour market situation in the wider European context.

The objective is not only to improve theoretical knowledge, but also for the teachers to gain a better understanding of the socioeconomic realities of the labour market. Moreover, this seminar will make it easier to process and use the available statistics.

A more detailed programme and registration form is available on the website www.nbbmuseum.be > Teachers’ Room.

Seminar on the labour market

Auditorium of the National Bank of Belgium
61 rue Montagne aux herbes potagères
Brussels

• French: Wednesday 20 October 2010 (1:30 PM – 5 PM)
• Dutch: Wednesday 6 October 2010 (1:30 PM – 5 PM)

Katanga Crosses

The Democratic Republic of Congo recently celebrated the 50th anniversary of its independence, giving us a good opportunity to bring up a very unusual object hailing from one of the country’s southern provinces, Katanga. It is the copper cross.

The province of Katanga has always had a rather special aura thanks to its wealth of ore deposits, and it has always been particularly renowned for its copper mines. These mines have been exploited for a very, very long time in Katanga. As early as the 16th century, the copper was being exported as far as the coast of Angola and from there right up to Europe. In the past, copper extraction and casting was the prerogative of a mysterious guild called “the copper eaters”, members of a sort of secret society, a “bwanga”. They were the only ones who were able to remove the copper ore and work it. Production of this precious metal was surrounded by rituals, professional secrets, traditions and magic. The trade of foundry working bore a stamp of prestige and sacredness. One first had to be accepted into the guild and then initiated to the craft before being able to work the copper.

Source: Réseau Documentaire International sur la Région des Grands Lacs africains, http://www.grandslacs.net/

The copper ore was mined during the drought season, around the middle of May. “Les Anciens” (The Elders), who were the group leaders, announced the start of the ore gathering by saying: “let’s go and eat the copper”. It was these same people who controlled production and distribution of the copper cross currencies. Women and children extracted the malachite (natural copper-carbohydrate appears in the form of undulating greenish crusts) close to the ground, while the men dug out deep wells, sometimes as deep as 35 metres, to extract the precious ore. The extraction process lasted for three months. The ore was then burnt and molten down in temporary or permanent high furnaces made out of the clay found in Katanga’s many termitaria. The high furnaces were fuelled with charcoal or small logs and ventilated with the help of bellows made from antilope skins. The copper was refined and cast in another oven. The melting metal was brought in via a furrow in a mould traced by finger in the sand in order to make lingots. These took the form of the Saint Andrew’s Cross, more commonly referred to as croisettes. Copper mining by “copper eaters” continued until 1903. After that, it was the Union Minière du Haut Katanga - which was later to become Gécamines, the Générale des Carrières et des Mines - which took over the copper production. But, even today, there are still some traditional copper diggers.

Katanga Cross

Over several centuries, the crosses served in their own right as a means of payment and exchange in many Central African societies. They were almost as valuable as ivory. However, the crosses have always had several different functions, and various symbolic meanings. Besides their use as a currency, the crosses served as lingots, a reserve commodity, and also as a symbol of dignity and power. They also appeared in different shapes and forms of craftmanship depending on the areas, kingdoms, chieftainships in which they were made. These differences made it possible to determine precisely how far the authority of the different kingdoms extended. The first copper crosses appeared in the 13th century in the tombs of what is now southern Katanga at the same time as cowries and beads made from molten glass, which were also used as a means of payment. A large cross was actually laid on the chest of the deceased. From the 14th century onwards, the crosses found in the tombs were no more than a few centimetres in size until they disappeared altogether in the 18th century. They were replaced by glass paste beads and cowries. And it was during the 18th and 19th centuries that the crosses were used for paying the levy that the copper-producing regions had to hand over to the Lunda Empire, an African empire occupying a vast territory spanning the present-day Katanga, northern Zambia and eastern Angola. At the end of the 19th century, beginning of the 20th century, the crosses started to be used in every-day trading. They also served as a means for paying matrimonial compensation. A woman’s marriage effectively implied a loss of labour for the bride’s family, which is why crosses were offered as compensation. A woman was worth a large cross, but a small cross could be added too if she had really remarkable qualities! During the 20th century, the crosses were used as medicine and as indications of dignity. Shortly after the Democratic Republic of Congo’s declaration of independence on 30 June 1960 - in those days it was called the Republic of The Congo and then Zaire - the province of Katanga wanted to gain its own autonomy, too. So, the province split away from the rest of the country following a coup d’état. During its brief spell of independence (1960-1963), Katanga chose the crosses as its official emblem. The National Bank of Katanga also issued coins that pictured small crosses.

Katanga's flag during its period of independence

Some local currencies like the copper crosses were of great interest to foreigners (settlers or merchants). Anxious to have control over the local currency, they tried to take it back for their own profit. The crosses were mainly used during the 19th century by the big Arab merchants on the trade channels right over to Kenya, on the east coast of Africa.

Laura Pleuger
Museum Guide

Bibliography:

• COQUET M., 1995. De l’anthropologie de l’art. Journal des africanistes, tome 65, fascicule 2: p.229.
• KUHN G. and RABUS B., 2009. Geld ist, was gilt, München, Staatliche Münzsammlung München: p.38.
• LEKIME F., 1966. Katanga pays du cuivre, Verviers, Gérard: 208 p.
• RIVALLAIN J., 1985. Paléomonnaies africaines: formes et fonctions. Actualité scientifique. Bulletin de la Société préhistorique française, tome 82, n°9: pp.265-269.
• RIVALLAIN J., 2001. Monnaies d’Afrique: visions africaines et visions européennes. Revue numismatique, 6ème série, tome 157: pp.121-130.

The national side of the new coin bears the official logo of the presidency (the letters “eu” and “trio.be”), the trilingual name of the country and the inscription “BELGIAN PRESIDENCY OF THE COUNCIL OF THE EU 2010″.

The coin is available to the public through the normal channels, including the counters of the National Bank of Belgium in Brussels or at one of its branches.

More info

Founded in 2006, the Museum Prize is awarded each year to an establishment in each of the country’s Regions, taking as the main criterion the efforts made by the selected institutions to involve the public in their work and to renew and diversify their attendance. Particular emphasis is put on activities targeting segments of the public that are hardest to mobilise and the more vulnerable categories of society such as children, the elderly, the handicapped and those of foreign origin, etc.

The jury noted that the National Bank’s Museum had no less than 29,365 visitors passing through its doors in 2009. The wide range of educational material deployed, as well as the Museum’s dynamism – reflected among other things by its active involvement in all initiatives taken by the network of Brussels museums – did not escape the jury’s scrutiny either.

At the end of the day, it was the Cinémathèque (nowadays called the “Cinematek”) that won the 2010 Museum Prize for the Brussels-Capital Region. But, for our Museum, it was no mean feat to be nominated along with such illustrious museums as the Magritte Museum, the Van Buuren Museum and the Horta Museum. By voting en masse for it, the public at large has given the whole NBB Museum team a perfect reward for all their hard work and limitless energy and enthusiasm.

Forgers, engraving in J. De Damhoudere, Practycke in criminele saken, 1555

Counterfeiting – an umbrella term covering not only the production of fake coins but also the forging of banknotes and other means of payment – is a perennial fact of life. Even in the days before coins came into use, people were faking the current means of payment; and shortly after the first coins were produced in the seventh century BC, the first forgeries also turned up. In some periods, counterfeiting took on epidemic proportions, often because the state had placed too few coins in circulation.

In the first century AD, for example, in the Roman Empire there were many unofficial coins in circulation, intended to compensate for the shortage of official currency. Another example of a period in which counterfeiting was widespread was the second half of the 19th century in the United States of America. At the start of the Civil War in 1861, it was estimated that roughly half of the banknotes in circulation were forgeries. This wholesale counterfeiting only came to an end when the government set up the secret service to combat large-scale fraud. By the end of the 19th century, this widespread counterfeiting in the United States had virtually disappeared.

The forgers trapped, engraving from a woodcut by R. Brend amour, in: De Belgische Illustratie, 1868

Counterfeiters may be driven by divergent motives. A first – obvious – motive is greed, as counterfeiting banknotes can generate big profits in a short time, even more so than producing fake coins. A less obvious motive may be vanity. There are several known examples of forgers who specialised in producing fake antique coins for sale to coin collectors, and even minted fictitious coins to demonstrate their ability. Finally, a third motive may be political.

There are a number of known examples of rulers who, on grounds of financial necessity, ordered coins to be minted from base metal and passed them off as genuine gold or silver coins. A well-known example is Frederick the Great (° 1712 - 1786) who ordered coins to be minted with an excessively high copper content; owing to a trick of chemistry, the coins took on a fine, silvery appearance. A more malign political motive is the large-scale counterfeiting of means of payment by an enemy state with the aim of destabilisation. The best known examples are Nazi Germany’s ‘Andreas’ and ‘Bernhard’ operations. Both focused on large-scale counterfeiting of the British pound. Operation Andreas was designed to flood the British market with fake pounds in order to destroy confidence in the currency and trigger hyperinflation. In 1942 the plan was redesigned and changed its name to Operation ‘Bernhard’. The primary aim was no longer the destabilisation of Great Britain but the provision of extra financial resources for the German troops. Altogether, millions of banknotes were forged, of which around one million were of sufficiently high quality that they could barely be distinguished from genuine banknotes. Although many of the notes were not actually placed in circulation, it was estimated that in 1944 roughly one in twenty British banknotes was a forgery. On the European continent, this percentage may have been considerably higher because, ultimately, it was mainly there that the counterfeit pounds were circulated, for the purpose of buying gold, ordnance and food for the German troops. It was therefore mainly on the continent that confidence in sterling was undermined, to a far lesser extent than in Britain itself, although that had been the original intention.

Forced labour as the punishment for forgery on the Beyaert-type 100 Belgian franc banknote (1978-1996)

As the last example shows, counterfeiting can wreak considerable damage. Not only at individual level – e.g. a trader who finds that he has been paid with worthless banknotes – but certainly also at macro-economic level. Large-scale counterfeiting undermines confidence in the national currency. For example, in 1888 a spate of forgeries in France caused such panic that the genuine banknotes had to be withdrawn. Counterfeiting of the means of payment has therefore always attracted severe punishment. In the Middle Ages, forgers could expect the death penalty: they were boiled alive or burnt at the stake. Although these severe penalties are definitely a thing of the past, the punishments for counterfeiting are still severe. The penalty for forging euro coins is five to ten years’ imprisonment, while those who counterfeit euro banknotes are jailed for fifteen to twenty years. Accomplices who help to place the forged coins or banknotes in circulation can also expect the same penalties. What many people do not know is that even those who have received counterfeit money themselves and try to pass it on are liable to be punished and risk a fine.

However, the European Central Bank, which coordinates the issue of euro banknotes, does not focus solely on severe penalties for counterfeiting, but also places heavy emphasis on prevention. Leen Bultinck, Museum guide Bibliography

• MALKIN, L., La guerre des faux-monnayeurs. Le complot des faussaires nazis et les déportés du block 19, City Editions, Paris, 2007, p. 178
• KAUCH, P., Les Faux-Monnayeurs,in: NBB-BNB Staff Magazine, 1960-1961

If we look back to the portraits embellishing Belgian banknotes, we find that the first realistic portraits did not appear until the First World War. It was mainly members of the Belgian dynasty who were honoured as a patriotic symbol and who served to deter counterfeiters. Gradually, they were followed by famous historical figures, who performed a role as ‘ambassadors’ for Belgium.

Apart from the kings, no living persons were ever immortalised on banknotes. The National Bank’s banknote committee always held long drawn out discussions, scrutinising the life, merits and fame of the personages before deciding who to choose. Not only was the aim to achieve a balance between the Belgian regions and communities; the candidates also had to be sufficiently well known, and have an unblemished record. Culture and science were the favourite choice: fourteen artists and three scientists were commemorated on banknotes. However, women were completely overlooked. Apart from the Belgian queens, only one female personality was selected to appear on a banknote: Margaret of Austria was depicted on the back of the 500 franc note featuring Bernard (or Barend) Van Orley. She was therefore carefully chosen.

From birth, Margaret of Austria (Brussels 1480- Mechelen 1530) was used by her father, Maximilian of Austria, as a valuable pawn in the European political game. She was the daughter of Maximilian of Austria and his wife Mary of Burgundy. In view of her Habsburg and Burgundian heritage, she was highly eligible. When Margaret was barely two years old, her father betrothed her to the Dauphin, later Charles VIII. She was taken to the court of Amboise where she received a French upbringing. However, in 1491 she was rejected by her betrothed, who saw Anna of Brittany as a more lucrative marriage partner. Maximilian was undaunted, and arranged for his daughter to marry the heir to the Spanish throne, John of Castile. It was a double wedding, because John’s sister Joanna married Philip the Handsome, Margaret’s brother. John died in that same year. Although Margaret was hardly enthusiastic about marrying for a third time, in 1501 she nevertheless married Philibert II of Savoy. Since her husband was not really interested in politics, she took over virtually all his administrative duties. This marriage, too, was short-lived: in 1504 Philibert died. For the rest of her life, Margaret always wore the widow’s cap depicted on the banknote.

500 franc note van Orley, verso

Clearly, the first part of Margaret’s life was rather turbulent, yet it gave her the huge advantage of being very familiar with the courts of Europe, and she had a good understanding of international politics. Furthermore, she had acquired an extensive knowledge of languages, having mastered not only French and Latin but also Castilian.

Margaret of Austria

Following her brother’s death (1506), Margaret of Austria took charge of bringing up her nephews and nieces; this meant that she also cared for the one who later became the Emperor Charles. As his guardian, she ruled over the Netherlands. One of Margaret’s most important achievements was the appointment of Charles as Maximilian’s successor to the imperial crown. As regent, she was also quite happy to take her own place at the negotiating table. In 1529 she made peace with the French king (Peace of Cambrai, 31 July 1529). Margaret was not the only formidable lady at the negotiating table: opposite her sat Louise of Savoy, the mother of the French king. That is why this peace was also known as the ‘Ladies’ Peace’. Its importance should not be underestimated. The Habsburgs finally had to renounce their claim to the Duchy of Burgundy. Once again it was confirmed that Artois and Flanders would be removed from the power of the French king, paving the way for the subsequent border between France and the Netherlands.

As well as being a born politician, Margaret of Austria was also active as a patron the arts. That is why the arch-duchess is depicted on the back of the banknote showing Bernard Van Orley. He was court painter to the Habsburgs. The Mechelen court was the place to be for all humanists and Renaissance artists. That is how Bernard Van Orley met Albrecht Dürer, among others, and saw the drawings of Jacopo de Barbari, the previous court painter to the Habsburgs.

The 500 franc note with Bernard Van Orley and Margaret of Austria was first issued on 2 July 1962 and was part of a series devoted to 16th century scientists and artists. That series determined the main colours of the Belgian banknotes for the first time: green for the 5000 franc, brown for the 1000 franc, blue for the 500 franc and red for the 100 franc note. There followed a change of printing technique: the offset technique was used to print the background on both the face and the back.

500 franc note van Orley, recto

The design of the whole series was entrusted to the Italian graphic artist, Florenzo Marino-Bessi, a specialist in designing banknotes. He may have based his portrait of Van Orley on a 16th century engraving by Filips Galle. On the face we see the portrait of Bernard Van Orley flanked on the left by the Brussels coat of arms (St Michael slaying the dragon). The head of King Baudouin serves as the watermark. On the back we can see the portrait of Margaret of Austria. It is based on a portrait by the court painter Van Orley. A replica of that work is currently in the Royal Museum of Fine Arts in Brussels. In the background is the Court of Savoy, the palace of the arch-dukes and one of the first Renaissance buildings in the Netherlands.

Katrien Costermans
Museum guide

Sources:

• CD-Rom, Le billet de banque belge, NBB Museum, 2001.
• DE IONGH, J., De hertogin. Margaretha van Oostenrijk, hertogin van Savoye (1480-1530), Amsterdam, 1981.
• National Bank of Belgium, The Belgian franc. Belgian coins and banknotes since 1830, Brussels, 1993.
• TE BOEKHORST, B., DANNEEL, M. and RANDAXHE, Y., Adieu frank: Het boeiende verhaal van België en zijn geld, Tielt, 2001.