Cash in circulation grew 8.23% in value from R155 billion to R168 billion between March 2020 and March 2021, according to the South African Reserve Bank. For retailers, the challenges of storing, securing and depositing large volumes of cash are immense, especially when they’d rather be focusing on driving sales and serving their customers.
“Cash is still a key payments instrument in South Africa,” says Mark Templemore-Walters, Operations Director at Cash Connect. “During peak trading periods like the festive season, automated cash management solutions from modern fintech companies shine at driving business efficiencies and reducing costs for merchants.”
He offers four simple ways that automated cash management solutions can benefit small and medium sized businesses:
Automated cash management is more cost-effective than managing notes and coins manually
In-store cash and Cash-in-Transit (CIT) insurance, cash shrinkage, deposit fees, back-office and cash counting supervision costs quickly add up. Depending on how much cash it processes each month, a retailer can save up to 40% in cash costs by deploying a fully automated, end-to-end cash management service with a secure cash vault.
Immediate risk transfer
A reputable automated cash management solution should feature a robust cash vault that ensures merchants can operate in a safer trading environment. This is like having a bank in the store. Once the merchant deposits their cash into the cash vault, there is an immediate transfer of risk, and the merchant’s funds are guaranteed with a same day settlement into their bank account.
Real-time access to cash flow
An automated cash management solution helps merchants to manage and improve their cash flow. With an Instant Access facility, merchants can access their cash while it’s still in their cash vault. If the retailer needs to make an urgent payment, but the cash is still in their vault and uncollected by the CIT service provider, they can access their cash in real-time with a click of a button on an app.
Increased business efficiency
Automated cash management saves time and money for the merchant by eliminating manual reconciliations and banking, counting and double-count supervision.
An added benefit is that merchants can have access to trading capital based on the cash and card volumes of the store. They can click and borrow to access up to R2,5 million working capital in just 24 hours, to stock-up, renovate, improve the in-store shopping experience, or buy a delivery bike! Plus, they can repay via small daily instalments from the cash in their vault, or directly from their bank account, so they don’t feel the impact on their cashflow.
Templemore-Walters concludes: “With more than 50% of consumer transactions (in rand) completed with notes and coins, according to the Payments Association of SA - cash is still king in South Africa. An automated cash management solution, along with fintech offerings like click-and-borrow access to working capital, is a must for any merchant that wants to improve cash flow, streamline cash management and take business efficiency to the next level.”