The decline in cash use has been exaggerated and cash volumes continue to rise across the continent, says the cash logistics arm of the multi-national security contractor G4S.
Mike Bowen, business development director for G4S Cash Solutions in the UK, spoke to Professional Security in Paris, after Graham Levinsohn, G4S Regional CEO, launched the report to a banking audience. First Professional Security asked about the concept of the ‘lean cash cycle’; namely being efficient, physically counting the cash as few times as possible. While there’s always room for improvement, Bowen spoke of more efficiency possible inside retail premises, ‘and commercial bank branches, frankly’. As he said, where you have multiple counting of cash, you have a multitude of risks: “Just by the nature of handing it on from one person to another, for starters; and exposing the cash and not being secure while you are doing it.” Hence the company’s Cash 360 service, trying to eliminate multiple counts for retail or other customers of cash logistics services; giving certainty that what’s being counted is valid, and then stored in a safe bolted to the floor. G4S as the only ones with access to the cash then, will underwrite that with the retailer. Another way of getting the most out of the takings is to get it into a bank and credited to the retailer (because until then, the cash isn’t of much use, even if it is in a safe). Hence G4S’ work with commercial banks towards speeding up the crediting of such cash, as the contract firm has done in the United States with a major retailer.
Shopping centre design point
Professional Security raised also the wider point for shopping centre managers and specifiers; that ATMs, with the risks of robbery, and cash in general, with risks of counterfeits, will still need mitigating, despite the spread of contactless and other electronic means of payment. Bowen agreed: “It would be a mistake to think cash is going anywhere quickly.”
The firm published a report on cash use across 28 European economies. It found that the volume of cash transactions across Europe continues to increase, having previously doubled every ten years. Concurrently the proportion of all payments made by cash has fallen, with 40pc of payments across the EU now made by card, electronic and digital payments. The volume of cash in circulation has increased 11pc a year up to 2015 with cash now making up 60pc of all payment transactions. ATM withdrawals, which are a good indicator of cash spending, increased 14.6pc between 2009 and 2014, representing an increase in value of 2.188 billion euros. In eight European countries, non-cash payments now make up a greater proportion of transactions than cash. The total volume of non-cash payments has increased to 102.3 billion transactions.
According to the 168-page report the UK has 14 cash logistics companies, with 11,665 personnel and 3129 dedicated security vehicles. Certification of cash in transit and cash management companies, as suggested by the European Central Bank, may not only lead to improved service but further consolidation in the CIT market, according to the report.
Graham Levinsohn, G4S Regional CEO, called on the cash industry to work together to modernise cash. He said: “What we are experiencing is a fundamental transition in the use of cash across Europe. European consumers and businesses will continue to use cash as part of a multi-payment economy. But we need to modernise how they can use it. The cash supply chain is highly fragmented across Europe which creates chronic inefficiency. In the most extreme cases cash could be counted up to 17 times from till to bank. However even in less extreme examples, the same cash is handled and counted multiple times as it is transferred between parties in the cash cycle. This creates an unnecessary cost burden on businesses and banks alike.
“We must work together to drive root and branch reform by streamlining and simplifying the cash cycles of Europe, creating fewer transfers between actors and consequently less duplication of effort. Significant cost efficiencies can be driven through the cash cycle so that cash remains a cost-effective payment mechanism into the future.”
Levinsohn urged the industry to work with the banking sector, central banks and policy makers to create what he termed a modern lean cash cycle.
