As far back as 1950, when credit cards first came on the scene, people have predicted the demise of cash. Granted, opinion as to whether cash is here to stay, or on its way out, is largely influenced by the source of that opinion and, in some instances, concentrated efforts are at play to disseminate misinformation in this regard.
However, the fact that there are more notes in circulation now than there ever has been and that 84% of transactions around the world are still made using cash, sends a strong message in itself. Statistically, the number of cash transactions may have declined as a percentage of total transactions, but as a result of the growth in the number of payments, cash continues to grow and remains the preferred method of payment.
In the 2012, US Federal Reserve System’s Diary of Consumer Payment Choice (DCPC) a survey showed that “cash use continues to be prevalent among people from all age groups and educational backgrounds and that cash is the preferred first or second choice as a payment instrument among all ages and socio-economic classes”.
Anonymity, integrity and ease-of-use, are sighted as the main reasons cash remains the preferred method of payment, but these same attributes also make this commodity highly sought after and the target of criminals. But, to be so naïve as to believe that a cashless society would eliminate this threat is just that, naïve. Criminals have never relied on targeting only one form of payment and the increase in cybercrime is a clear indication that they will take from where they can.
Cash is attractive
Over the past 10 years, South Africa has experienced a shocking 337% increase in armed robberies against businesses with a notable increase in the levels of violence used during these attacks. This equates to 51 attacks a day, and last year alone South African businesses were attacked 18 615 times.
But, we are a resilient country and have been at the forefront of developing technology to combat such attacks and to remove the incentive to steal. By ensuring that every element of the cash management cycle is protected, criminals are forced to seek other ways in which to enrich themselves.
A broad range of technology used to deter criminals and protect cash is available throughout the country. And, as a result of the high levels of crime experienced by local businesses, South African companies specialising in the safekeeping and transport of cash have invested millions in research and development. Although much of the technology has been around for a number of years, the continual upgrading and development of systems has earned South Africa the reputation as leaders in the field of cash management in volatile environments.
Automation works
One of the most effective ways in which businesses are able to secure cash (notes and coins) on their premises, is by securing it in an automated banking device – the equivalent of an intelligent safe. The range of devices available is broad, and depends on the functionality required, and the level of security and protection needed on site.
Having secured cash on the client’s premises, security during the remaining stages of the cash cycle needs to be considered. Unless the cash on the premises will be recycled, it needs to be moved from the client’s premises to either a bank or a cash processing facility. This transfer of cash should be arranged through a reputable cash-in-transit company. It is no longer safe for businesses to ‘walk’ their money to the bank. Ensure that your cash-in-transit supplier employs registered and trained security officers that are issued with body armour and firearms for personal protection. These companies must also use the technology design to protect your cash. Cash should be moved from a client’s premises, to a fully armoured vehicle, in tamper-evident bags, which should, in turn, be secured in a cross pavement carrier design to render notes unusable if illegally taken from the security officer.
The armoured vehicles deployed by cash-in-transit companies are a far cry from the soft skin vehicles used many years ago. Today, these vehicles are fully armoured and are fitted with the latest tracking technology and protection to ensure the safety of both your assets and the staff performing these services. The investment in research and development and the implementation of technology by cash-in-transit companies in their operation is clearly evident by the 18% decrease in cash-in-transit heists for the year.
Keep an eye on your money
It is also imperative that throughout the cash cycle, the client and various service providers are able to pinpoint exactly where the cash is. This is facilitated through a number of highly sophisticated software programmes. These programmes can also be used by the client for management reporting and the tracking of business trends, resulting in the ability to implement business efficiencies.
So, businesses need not suffer as a result of crime, the technology exists to protect cash, but at what cost you say?
Many cash management operators have conducted research into the cost of a business managing its own cash versus partnering with cash management specialists. Every business is different and the requirements of their systems and process are client-specific, but if one compares the direct costs of traditional cash control versus a conversion to, say, an automated cash management services the results are surprising. Businesses need to take into account the costs of insurance, shrinkage, staff employed to manage the back-office, the cost of funds held on site and deposit fees, to name a few factors.
These costs, coupled with the risk of doing business in our current environment and the potential for cash loss, or worse still, loss of life, add up to a hefty sum. Can your business afford the reputational risk and subsequent trauma experienced by staff and patrons?
No one will deny that the cost of protecting your assets, staff and patrons comes at a price, but instead of viewing this as a grudge purchase, businesses need to see this as an investment and ensure that their cash management solutions are working for them. Increasingly, operators are developing systems that add value.
Integration delivers value
Businesses should not look to cash management specialists for protection only, but should investigate solutions that are able to integrate with their existing systems to streamline business processes. Imagine, for example, secure point-of-sales systems that tie into procurement systems and are able to produce management reports that result in accurate purchasing power. The possibilities are endless and the market needs to meet this challenge.
In conclusion, other payment methods have their place. But, when one considers reports by the US Federal Reserve in which they predict an average growth in cash of 1,7% per year from now until 2022, as well as the general consensus by 79% of central bankers, commercial banks, and cash management companies surveyed by Currency Research in 2012, that cash will increase for a decade from that date, we still have a long relationship with cash.
So, for the foreseeable future cash is here to stay and we, as a society, owe it to ourselves to protect, stimulate and grow our economy and we owe it to this age-old commodity to treasure and protect it. Why force such a valuable commodity toward extinction when a cashless society is clearly not the preference of the majority of people? For years people have fought for the right to choose – allow them to, and allow them to do so safely.
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