Managing the Cash Cycle
werein circulation in 2008
compared to 2000
Plenty of Cash Causes Plenty of Costs.
“Cash is king.” Nearly 20 years after the introduction of cashless payments, cash transactions still dominate payments in many countries around the world. In the eurozone alone, banknotes worth more than €677 billion were in circulation last year – three times as many since the launch of the euro in 2002, according to the European Central Bank. But not only in the eurozone is cash in big demand; it is also huge in the U.S. where the circulation of dollars was up 42%, according to the study “The Future of Cash” by AGIS Consulting. And in numerous Asian countries, many people still have no bank account, resulting in a high use of banknotes, which are also of lower value.
What these numbers don’t show, however, is that the flow of banknotes and coins causes considerable work and creates enormous costs and, in some cases, even risks. Accepting cash or making change are labor-intensive tasks, which become even more laborious if cash has to be recounted at the end of a cashier’s shift according to the four-eye principle.
The flow of cash back to consumers is equally complex. It begins with cash-in-transit (CiT) companies, which bring cash to the central banks via their own cash centers. There, all banknotes undergo a “fitness” test to prove their authenticity, are sorted and finally delivered to the banks by the CiT companies. The banks, in turn, replenish their cash points, including ATMs, safes and cash registers, thus completing the cash supply cycle.
