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Q&A: Mitigating cash-related risks

Power outages are slowing cashless migration. Businesses should plan for cash to be a significant part of their payments mix, says Jason Coussens, Nashua Kopano Manager: Currency Management.

South Africa’s load shedding crisis is slowing down the migration towards cashless payments, as consumers and businesses turn to cash as the most reliable means of value exchange during power outages. Businesses should thus plan for cash to be a significant part of their payments mix for even longer than they may have anticipated, says Jason Coussens, currency management business unit manager at Nashua Kopano. Consumer surveys indicate that 95% of people withdraw cash at least once a month, and that 86% still make use of cash for at least some of their transactions.

What effect has load shedding had on digital migration?

South Africa’s load shedding crisis is slowing down the migration towards cashless payments, as consumers and businesses turn to cash as the most reliable means of value exchange during power outages. Businesses should thus plan for cash to be a significant part of their payments mix for even longer than they may have anticipated. Cash remains king in South Africa, and while people in urban areas have embraced ‘tap and go’, ‘scan to pay’, and other digital payments instruments – with adoption soaring during the pandemic – some of these gains are being reversed. Load shedding is driving consumers and businesses back to cash because cash transactions aren’t disrupted by electricity or internet connectivity outages. Unlike credit card terminals, online payment gateways, and mobile payment apps, which may involve authorisation processes or pending transactions, cash payments provide immediate settlement on the spot. They are considered a final transaction, offering certainty without the need for a confirmation of payment.

How do we then modernise cash management in the current context? 

More efficient cash management should be on every business radar. Many businesses are still counting notes and coins manually, which exposes them to a higher threat of fraud, error and shrinkage, and also absorbs human capacity that could be used more productively elsewhere in the business. Tellers in a fuel station in an urban area could spend two and a half hours of their day on cash-related tasks such as running floats, filling ATMs, and counting and sorting coins and bank notes. By implementing modern, high-speed banknote processing systems, they could reduce the time it takes to sort R50,000 in notes to around 15 minutes, for example. Today’s automated money counters can count large amounts of coins and notes faster and more accurately than a human. This makes cash management processes – such as payments in and out of the counter, or daily closing of tills – significantly more secure and efficient, as well as being more cost-effective.

But as importantly, it can vastly reduce a business’s cash-related risks. Anti-counterfeit detection for notes and coins can help a business reduce the legal and financial risks of inadvertently accepting fake notes. Green ink and other dye stain detection can alert the business if a customer tries to present notes stolen in a cash in transit robbery. And eliminating human counting will vastly reduce shrinkage.

Where can cash management technology evolve?

Money counting machines are no longer just for casinos, banks, and the largest retail environments, there are also compact and affordable units that are suitable for businesses handling as little as R10,000 a day in cash. In fact, smaller organisations with smaller headcounts may appreciate the time the technology saves even more than bigger companies. Automated cash management eases a major operational challenge for companies in a country where cash usage remains high.

Some applications in vertical markets include:

  • Counting all notes and coins, including foreign exchange, in a tourism business like a hotel.
  • Verifying school fees and counting tuck shop payments or collections at fundraising events in education.
  • Fitness sorting, multi-currency and token counting for gaming establishments.
  • Float recycling and stocking of float bags in retail.
  • Tracking cash donations and collections for churches and NPOs.

 

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