Optimising The Retail Cash Chain

The Truth About Cash, From Pocket To Profit

It’s not been hard, over the past two decades, to find articles and papers confidently stating that cash is on the way out, and sooner rather than later. This kind of prediction has normally been made by people and companies seeking to promote their own alternatives (often technological) to cash yet, despite their best efforts, cash remains in robust health in almost all of the world’s markets.

It’s now more than half a century since the first plastic card was introduced and there is more cash in circulation across both developed and emerging economies than at any time in history. Cash remains the single most important means of payment in some very surprising places. Germany being the most cash-intensive economy on earth, and over half of all transactions in Australia, France, Canada & the Netherlands are conducted in cash. Even as the ”omni-channel revolution” gains pace, it is instructive to note just how many Germans prefer to pay for their purchases on delivery, in cash. The selection and ordering methods, in other words, seem to be changing faster than the actual payment preferences. Globally, cash payments still account for at least 20% of all retail transactions by value. and that figure is staying surprisingly robust, despite the efforts of digital revolutionaries to reduce it

In order to start transforming the efficiency and value of the retail cash chain, we need to think differently about the potential role of cash within our increasingly technology-enabled economy, and then take practical steps to improve efficiency at every key stage in the chain. Cash can evolve to become an Electronic Payment. A key enabler of cash as an Electronic Payment is a concept called ”Provisional” or ”Same Day” credit. This is a growing trend in a growing number of retail banking environments and is already established in many markets including the United States, South Africa, The Netherlands, Russia & others, Technology is used to ”Authenticate”, ”Secure” and ”Automate” Cash to the point where there is a high enough level of assurance on the value of the stored cash at any one time such that the retailer’s account can be credited on the same day. Ultimately, this could be when cash is received at the Point of Sales or when it is deposited in the back office.

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