Remote Cash Capture: An Idea Whose Time Has Come

by Bob Meara, March 25, 2009
Industry Trends
North America

Abstract

New York, NY, USA March 25, 2009

With the amount of cash in circulation still growing, remote cash capture is taking a bite out of the cost of cash acceptance among a growing number of merchants.

In a new report, Remote Cash Capture: An Idea Whose Time Has Come, Celent looks into the quickly growing service, which is the deployment of secure, validating currency accepting and recycling equipment (aka smart safes) at merchant locations, coupled with information reporting and provisional credit mechanisms. Such equipment has been in use for nearly 15 years in the US as a means to improve merchant cash cycle control.

Celent estimates there have been some 25,000 "smart safes" installed in the US. Among them, approximately 15,000 are installed as closed-loop systems affording provisional credit from participating banks. With the broadening of bank participation and concurrent product improvements witnessed, Celent expects continued growth of remote cash capture of between 6,000 and 10,000 safes per year through 2012.

The advent of bank-offered provisional credit based on validated currency residing at the merchant location is a relatively recent phenomenon. Its emergence has caused a surge in interest and adoption of these devices. The offering of provisional credit by participating financial institutions has significantly improved the merchant business case for remote cash capture. However, the float benefits involved are secondary. The primary benefit of provisional credit rests in its ability to enable wholesale reengineering of the cash cycle within merchants and between merchants, armored couriers and banks cash vault networks. In the process, RCC removes substantial cash handling burden historically carried by bank branch personnel, largely without the assistance of meaningful automation. In short, RCC is a win-win-win wherever the merchant business case warrants

"RCC is innovative for the collaborative service delivery required to bring it about. Historically working in isolation, banks, safe manufacturers, and cash logistics providers are now collaborating to add considerable efficiency to what had been an antiquated and error-prone cash cycle in many businesses," says Bob Meara, senior analyst with Celent’s Banking Group and author of the report. "But RCC adoption is not setting records. Both economic and systemic barriers limit its adoption." Even so, RCC will become an important mechanism for reducing the cost of cash acceptance and downstream processing for those who participate.

The report begins with a snapshot of the current state of cash payments in the US followed by a background in relevant cash logistics both at banks and merchants. It then explores remote cash capture along with the value propositions for all parties in the value chain. The value proposition for banks is highlighted through a case study of BBVA Compass. The report then provides a solution comparison among cash logistics providers and hardware manufacturers selling direct to merchants. Finally, the report details an outlook for future adoption of remote cash capture.

This 46-page report contains 17 figures and 12 tables.

A table of contents is available online.

Members of Celent's Corporate Banking research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Executive Summary 3
The State of Cash Payments 5
  8
Cash Cycle Management 9
  9
  11
Remote Cash Capture 17
  19
  20
  23
  25
  27
Solution Comparison 30
  30
  33
  36
  38
  40
Outlook 42

 

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