Is cash dead?
According to a recent webinar hosted by our sister publication Kiosk Marketplace and sponsored by ARCA, the answer to that question is a resounding "no."
During the webinar "You can't afford to ignore cash," a panel of experts discussed why cash acceptance is vital to your business, how cash automation increases the bottom line and gave tips on how to assess the true cost of cash.
Pete Sentowski from ARCA's solutions development team explained that, contrary to some opinions, cash is growing in usage around the world.
"There are numerous payment options available, but cash is a component that should be emphasized," Sentowski said. "Around the world, 85 percent of all retail payment transactions are done with cash, which equates to 60 percent of retail transaction value. In the U.S., 48 percent of all retail transactions are made with cash."
And it's not all Baby Boomers and grandmas paying with cash, either. Sentowski said the largest demographic of cash users are young people between 18-25 years old.
So why is it essential to have cash in a kiosk? Sentowski gave two keys to accepting cash:
- You never want to turn a customer away or let them be disappointed in your service or product.
- More importantly, cash increases your bottom line, since cash does not have the associated fees with credit or debit.
"Over the last 20 years I have been involved in a lot kiosks on the bill-pay side," said Craig Keefner, manager of Connected Technology Solutions and a presenter in the webinar. "Working on the devices, we always try to prioritize the types of transactions, and cash has always been primary. Over the years, if we look at the numbers and the usage in self-service, cash is always the largest part of it."
While there are cons to using cash — it's dirty and difficult to handle — the right technology hardware in your kiosk could minimize the cost of cash through automation. Whether using cash acceptors and dispensers in an automation solution, or choosing a cash recycler, Sentowski said that by reducing your cash in transit you will ultimately minimize the cost of handling cash.
From a retailer's perspective, there are several other considerations for choosing a cash automation solution:
- Cash control
"There have been many ROI studies done on the cost of cash," Sentowski said. "Cash automation does pay for itself over time and payoff is probably shorter than you expect. Especially with shrinkage, which is generally 1-to-3 percent. So you can imagine a large retail operation and the cost associated with that amount of shrinkage. A cash automation solution can negate that."
Going further on the point of shrinkage, Sentowski said businesses can benefit from the error-free automation solutions in back room cash-counting operations, which can also benefit the bottom line by reducing labor costs.
Gary Stachan, director of operations for Turnkey Kiosks, said that the vast number of unbanked should also boost the need for your business to handle paper currency.
In addition, with the more than 450,000 ATMs in North America and the more than 2.2 million ATMs worldwide, there is a massive portion of the global population that relies on cash, Strachen said.
"There are 37 million people that are unbanked in the U.S.," Strachen said. "You would not be able to service them without the use of cash."
To download the free, on-demand version of the webinar, click here.