How To Unlock The Full Value Of Cash

By Simon James, CEO, PayComplete

At a time when digital and electronic payments dominate, the resilience of cash might seem surprising. Yet, despite the explosion of contactless cards, mobile wallets, and online banking, the use of cash by consumers continues to flourish. 

According to the BRC, in 2023, cash accounted for 19% of all transactions in the UK thanks to its practicality for budgeting and a resurgence in use after the pandemic. Moreover, it is estimated over $40 trillion of physical cash is in circulation worldwide. Clearly, consumer behaviour is challenging many assumptions of a cashless future, even prompting moves by many countries to enshrine access to cash in law such as by the Financial Conduct Authority.

PayComplete’s recent study, the Cash Chasm report, investigated the opinions of decision-makers within the retail, hospitality and leisure sectors worldwide to assess the status of cash management. Crucially, it was discovered that 57% of businesses expect to never go fully cashless. This is great news for consumers who favour using cash. Yet, despite this, many businesses are still not giving cash the full attention it deserves, with a lack of automation leading to spiraling costs that substantially decrease its value and worth.

The Hidden Costs of Cash

Out-of-date manual processes for handling, storage, counting and reporting cash are creating huge inefficiencies that greatly increase the cost of cash.

When people handle cash in your organisation, several issues can arise. Inevitably, labor costs increase, and at best, cash flow is disrupted and slowed. At worst, accounting errors can occur, or cash may even go missing.

From our research, four key areas that need attention stood out:

  • Cash discrepancies Each stage of cash handling – from the moment a customer pays in cash to it being counted, stored, transported, and banked – presents a potential opportunity for discrepancies to happen. According to the Cash Chasm report, 45% of organisations with over 30 locations identified cash discrepancies as their biggest concern when handling and processing physical money.
  • Cash security – Naturally, security is a concern when handling and processing any form of payment, whether electronic or physical. When it comes to handling cash, when six people or more are involved security spending increases by over 380% to a median of over £400,000 per year. 
  • Cash management costs – The high costs of cash management, for example, transport costs, personnel costs, and insurance, were cited as the third biggest concern (27%) across the organisations we surveyed. These are needless expenses when cash is managed digitally.
  • Cash visibility – The speed of manual approaches to cash management, as well as the potential for discrepancies, means it’s almost impossible for organisations to have real-time cash-related data and visibility. However, as cash management becomes more automated, businesses can use the data it generates to allow for real-time reporting. By partnering with trusted and secure providers, they can also do this in a way that addresses growing regulatory concerns about data protection.

Modernising Cash Management

Evidently, manual processes are holding organisations back from realising the full value of cash. Nonetheless, just as card payments evolved from low-tech systems like pen-on-paper slips to magnetic stripes and now fully interconnected electronic systems, cash is undergoing its own revolution which promises to break this destructive cycle.

The use of advanced CashTech – smart hardware and software to automate cash management – can create the much-needed efficiencies, and reduction of unnecessary costs, businesses so desperately need.

Automated systems like note counters and coin sorters enable businesses to accurately count and reconcile cash transactions. CashTech can also bolster security by minimising the risk of theft and fraud. Smart safes, equipped with advanced authentication technologies, provide additional protection against unauthorised access. By digitising cash handling processes, businesses can monitor every transaction and deposit in real-time, detecting anomalies and preventing potential security breaches.

Importantly, when it comes to customer experience, businesses should always look to provide options for their customers to pay in whatever way they choose. By offering smart cash payment solutions, alongside digital options, businesses can significantly enhance customer satisfaction and encourage repeat purchases. In this way, businesses can simultaneously cater for all types of payments, as well as ensure the highest levels of sophistication when it comes to reporting on transactions and reducing risks.

Ultimately, cash is alive and kicking. CashTech presents an opportunity not only for significant cost savings and efficiency gains but also for fulfilling customers’ preferences for using physical money. With governments globally aiming to maintain access to cash in law, and many businesses committed to accepting it, it is now up to these same organisations to fully harness its potential and unlock its previously hidden value.

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