Cash Chasm report reveals drawbacks of manual cash management

The global assessment of cash management in industries such as retail, hospitality and tourism is set to shed light on business engagements with physical currency and their expectations of becoming cashless in the near future. PayComplete, the cash management solutions provider, will release their report dubbed 'The Cash Chasm' on Wednesday, 24 April 2024.

A pivotal finding from the report indicates that approximately 57% of businesses don't foresee a fully cashless operation, as they continue to navigate the landscape of electronic, card and mobile payments. However, despite recognising the persisting relevance of cash, a significant number of organisations exhibit antiquated practices in cash management. Astonishingly, 41% of businesses still rely completely on manual processes for cash handling.

More alarming is the report's revelation that businesses can lose 20% of the value of cash when three to five individuals handle it. Furthermore, if more than six individuals are engaged in cash handling, businesses face escalating security expenses that, on average, can exceed £409,000! Therefore, businesses are hemorrhaging hard-earned revenue through these outdated and inefficient practices.

Cash in circulation stands resilient at an estimated $40 trillion across the globe. Contrary to the expectations that cash usage would diminish post-pandemic, the reverse seems to be the case. Paper notes, such as the US dollar, have reportedly increased in circulation. Even countries that lead the charge in payment innovation, like the UK, have plans from their Financial Conduct Authority to legislate the protection of access to cash.

Simon James, PayComplete's CEO, compares the digital evolution of cash management to the transition of card payments from pen-on-paper slips to magnetic stripes and ultimately fully integrated electronic systems. Highlighting the vast room for progress, James insinuates that businesses should adopt a more progressive and digital attitude towards cash management.

The 'Cash Chasm' report underscored the overwhelming dependability on manual processes, with 41% of organisations admitting to conducting entirely manual operations, reaching up to 62% in France that lags behind the global average. A distinct lack of automation has resulted in troubling inconsistencies for 34% of organisations, where discrepancies arise in their handling and processing of cash. France and Spain bear the brunt of these issues at 54% and 43%, respectively. More than one in three (35%) organisations resort to suggesting electronic modes of payment to their customers in their bid to increase overall efficiencies, despite the preference for cash payment.

Introducing automation in cash handling is crucial considering the excess costs incurred due to inefficient processes as well as the potential losses from risk, fraud, and theft that can be curbed by a staggering 280%. By reducing the number of people involved in these processes, organisations can substantially cut their operating expenses.

Simon James accentuates the minimal number of forward-thinking businesses; only 27% have fully automated their cash reporting systems. He asserts that while others aspire to steer customers away from cash payments due to their efficiency, a more streamlined strategy would be to undertake a holistic review of cash management and integrate new technology to achieve higher efficiency levels.

James concluded by reinforcing his view that cash is far from being a relic of the past and suggested that adopting the latest CashTech solutions, businesses can get a comprehensive view of their payment ecosystem, which combines electronic and cash payments.