Report shows is here to stay but cash management remains stuck in the 'Stone Age'
PayComplete research finds 57% of businesses expect to never be fully cashless
Cash is here to stay, a new report by PayComplete has revealed, with nearly 6-in-10 businesses (57%) expecting to never be entirely cashless despite the widespread adoption of electronic, card and mobile payments.
The Cash Chasm, a new research report from the global cash management solutions provider, surveyed cash processing and management decision-makers within the retail, hospitality, and leisure sectors from across the world, to assess the status of cash management.
It found that many businesses are still stuck with manual processes for handling, storage, counting and reporting cash that create huge inefficiencies that literally leaves ‘money on the table’.
Shock findings revealed 41% of companies still use manual cash-handling processes, leading to many businesses spending over £400,000 a year on excessive security costs which could be slashed with the introduction of new CashTech solutions.
The UK has seen the Financial Conduct Authority (FCA) announce the need for new legislation to enshrine access to cash in law.
"Cash is alive and kicking in the 21st century. However, organisations aren’t giving it the attention it deserves," said Simon James, CEO of PayComplete.
"Just as card payments evolved from low-tech systems like pen-on-paper slips to magnetic stripes and now fully interconnected electronic systems, cash is having its own digital revolution."
“Previously cash management advancements relied on new hardware being deployed, but this piecemeal approach has created fragmented, Frankenstein cash estates that are inefficient and reliant on manual processes. It’s time for a new digital attitude to physical cash.”
Highlights from The Cash Chasm Report found an over-reliance on manual processes, with 41% of organisations admitting to having an entirely manual cash handling process..
This figure jumps to nearly two-thirds (62%) in France, which lags behind the global average.
Over a third (34%) of organisations said its biggest challenge is discrepancies when handling and processing cash due to low levels of automation.
France (54%) and Spain (43%) are the regions with the biggest discrepancy issues.
While 20% of the value of cash is lost for organisations with 3-5 people handling cash.
Moreover, more than one in three (35%) organisations encourage buyers to use electronic payment methods to increase overall efficiencies, despite cash remaining a strong customer preference for payment.
It also found that 31% of organisations are tightening processes and increasing staff training to offset their lack of automation, further increasing unnecessary operational expenditures.
This lack of automation is having a "major impact" on business operations leading to issues including cash discrepancies, security worries, and high cash management costs, which were ranked as the top three cash handling and processing challenges.
High costs due to inefficient processes are a massive concern for businesses. Research reveals that when over six people are involved in cash handling, the cost of security measures increases by over 380%, to an average annual cost of over £409,000. By reducing the number of people involved in cash handling, businesses can slash their operating costs while simultaneously reducing losses from risk, fraud, and theft by an astounding 280%!
James continued: “Only a few (27%) forward-thinking businesses have fully automated their cash reporting with CashTech systems.
"This lack of automation when it comes to cash holds organizations back from reaching their full potential. Cash management has left the Stone Age and entered the Digital Age.
"While some organizations are looking to steer customers down the route of cash payments due to their efficiency, the report reveals how others are looking to develop a dual strategy where the cash management processes are reviewed holistically and optimised with new technology to achieve levels of efficiency that have previously only been associated with card payments.”
He added: “Adopting the latest CashTech solutions to automate and fully connect their cash estates, allows businesses to finally have a complete view of their payment ecosystem that combines electronic and cash payments together.”