As technology continues to advance at a rapid pace, virtually no aspect of daily life has been left unaffected. And the payment industry is no different. New digital payments are constantly popping up in an attempt to make transactions faster, more convenient, phone-based, internet-based, and chip-enabled. It all started with debit and credit cards, but now we have digital cheque scanning technology, digital wallets, Interac e-transfers, and many other new digital payments to choose from.
But as our payment options become more high-tech and varied, good old-fashioned cash remains the most popular way to pay, for older generations and millennials alike. It still accounts for 40% of all transactions. And it is particularly popular for small transactions under $10.
The Push to Smart Safes
The banks aren’t giving up on the management of greenbacks due to the rise of these digital payments, though. In fact, they’re incentivizing retailers to continue to accept and manage cash instead of getting on board with new digital payments that don’t offer banks any income. Cash management is still big business, after all—and one with much-needed bank fees. Banks are using technology to their advantage to make cash management more convenient, accurate, streamlined, and efficient as possible.
In order to generate fee income, banks are pushing retailers that handle large volumes of cash, including quick-serve restaurants, big-box stores, convenient stores, healthcare providers, sports establishments, and gas stations to get on board with smart safe technology. Because cash isn’t dying out just yet, banks are capitalizing on retailers’ need for better and more cost-effective cash management, even as digital payments rise in popularity.
What Are Smart Safes?
The smart safe, made by manufacturers such as Glory and Triton, is a niche product that retailers can use in order to effortlessly sort, track, and report on their physical cash. It’s particularly helpful in speeding up end-of-the-day deposits. The smart machines count, sort, and verify the cash automatically. . This can reduce the cost and risk of frequent armored-car pickups or bank trips and improve cash flow.
Additionally, the smart safe can significantly reduce labour costs by performing previously labour-intensive cash-handling activities in just minutes. It can also reduce losses due to increased accuracy and reduce internal theft thanks to its user tracking and cash tracking capabilities. With the cost of cash continuously rising, the smart safe is a great solution to cut the time and costs associated with cash management activities. Retailers that handle large volumes of cash can easily justify the investment.
The Smart Safe Business Is Growing
As the digital payment industry continues to grow, so does the smart safe business. Banks are cashing in. Fifth Third, for example, has nearly 9,000 safes in the marketplace. The industry generates over $30 million a year, which equates to approximately 1% of banks’ noninterest revenue. Installations of these digital safes at PNC also rose by 60% last year, making it clear that retailers are getting on board.
Banks typically offer smart safes as part of a bundle of services—they lease the safe and arrange for period CIT provider pickups, which the customers pay for on a monthly basis.
Big banks and small financial institutions alike are angling for a piece of this business in order to reap the financial benefits, and as such, the business is only expected to grow in the future. When it comes to smart safes, both retailers and banks benefit, making it a win-win.