The future of cash management for the retail industry.
Cash in the world of retail, is, to quote a famous anchorman, kind of a big deal. So, don’t believe the naysayers; cash is here to stay. Electronic payments are, of course, becoming more and more common. However, our research has shown that many companies and their customers still prefer to deal with actual cash.
The proof is unequivocal. In fact, according to the most recent research from PayComplete, 55 percent of retail organizations anticipate continuing to take payments in cash far into the future. Not only that, but the FCA has passed new legislation to protect cash access in the UK. This means that cash will remain a prominent payment method for the foreseeable future. This opportunity allows retail businesses to reconsider payment methods, save expenses, and enhance customer experience.
Managing cash ineffectively comes at a cost
One of the striking things in our research – The Cash Chasm – was that many retail establishments inefficiently handle cash. Nearly all retail stores surveyed (38 percent) still handle cash by hand. Costly, yes, but it also consumes essential time. Retailers spend almost £333,000 on cash security annually, while businesses are losing £58,000 every year because of cash handling errors even with this investment. That is money that could be better used for staff training or retail upgrades.
About 36 percent of merchants are encouraging customers to use cards or contactless payments to offset these losses. However, this isn’t a sustainable solution. Moving people away from their preferred habits is likely to be detrimental to the customer experience, while the additional costs associated with electronic payments, such as processing fees, limit any cost savings that could be made.
Certain stores are also trying other measures to help manage cash better. For instance, nearly a third (32 percent) of retailers are implementing tougher cash handling regulations, while a similar amount (30 percent) are conducting audits and offering frequent staff training (30 percent). While these actions are constructive and much needed, they are essentially band-aid solutions. These approaches don’t provide a fundamental and long-term fix for the issue.
At the heart of the problem is the reality that a lot of retail establishments still use outdated cash handling procedures. Cash handling for many businesses is frankly archaic in a time when everything else is going digital. While cash is an old and well-established payment system, it doesn’t mean the systems, technologies, and processes underpinning it can’t be brought into the digital age. By closing the digital gap between cash payments and every other retail business operation, retailers will save money, increase customer happiness, and underpin growth and profit potential for years to come.
How does CashTech work?
Enter CashTech. CashTech encompasses the technological advancements around physical cash. It comprises of two parts: smart hardware solutions and cutting-edge software. Combined, these two parts enable CashTech to reduce cash discrepancies, eliminate inefficiencies, and create real-time data to enhance business operations. Moreover, CashTech supports improvements in customer satisfaction by providing payment options and choices at a time when consumers worldwide demand financial and data freedom.
CashTech revolutionizes cash management, like how FinTech altered the way businesses handle their finances. Using CashTech, retailers can fully integrate all their cash-handling equipment into a single system, regardless of brand or model. This allows them to connect cash management with other critical operations, such as accounting and customer experience and provides them with a comprehensive view of their cash estate.
This changes the game for retailers. They can cut expenses associated with operations and eliminate money lost to mistakes by digitizing cash transactions. Retail businesses can identify irregularities and stop cash losses by monitoring every transaction and deposit in real-time. When currency is used for payment, for instance, automated tools can count and reconcile it more precisely. CashTech can improve security by lowering the possibility of fraud and theft. Advanced authentication technology in smart safes can provide additional security against unwanted entry. Grocers can save time by expediting end-of-day close-outs and openings by having instant access to data on cash payments.
Thanks to these improvements and enhancements CashTech creates, it is cost-effective to continue accepting and promoting cash as a form of payment. This is crucial for the customer experience, as consumers expect to be able to pay using their preferred method, and they will have a negative view of a retailer that prevents this.
To put it bluntly, cash is a big deal for customers. Although many believe that there will be no cash in the future, it is a fact that businesses will always benefit by providing clients with all their payment options, including cash. Unlike any other payment method, cash usage is now protected by law. Retailers should take this opportunity to reconsider their cash-handling procedures because many customers still prefer to pay with cash. It’s no secret that businesses must manage funds as effectively and efficiently as possible, including cash. Still, businesses must wake up to the potential saving costs of implementing CashTech and the potential customer acquisition and retention benefits that come with it.
For a list of the sources used in this article, please contact the editor.
By Simon James
Simon James, CEO of PayComplete, the global leader in CashTech solutions. It combines smart hardware with best-in-class proprietary software to unify the processing of cash with other payment methods and operational systems through retail, hospitality & leisure, banking & financial services, mass transit and parking, vending, cash centers and mints as well as through its OEM and system builder partnerships.