Cash and digitalization – How can these go hand in hand?

With its ChangeExchange, ALVARA offers the key to cost reduction and client proximity in cash management

2017-12-06 – The German Trade Association HDE has been studying the topic of cost development for hard cash and the search for ways out of the price spiral. Ulrich Binnebößel, Head of HDE’s Division of Payment Transactions and Logistics, presented the latest considerations on the expert conference “Digitalization Knows No Limits – Cash Processes 2.0” which took place in Leipzig in September. In his keynote speech titled “Payment in Retail”, he focused on possible perspectives in cash development.

The proportion of turnover in cash has been declining for years and, so far, there are no signs that this trend will be reversed. A total 51.3 percent of payments are made in cash, 48.7 are cashless. Cash still clearly dominates at the point of sale in retail at 77.9 percent according to a study conducted by the EHI Retail Institute in 2016. Payments for small amounts of up to 20 euros represent the majority of all cash payments in store.

So far, only half of the retailers do not pay fees for the procurement of their coin rolls but the proportion is steadily growing because of the banks’ cost pressure regarding cash. A total of 37 percent of retailers already pay more than 11 cents per roll or often fixed fees per year or coin dispensing at their respective bank. The average price per roll is 36.3 cents and strongly varies depending on the procurement source. Cash-in-transit companies tend to offer the lowest prices per roll but often only serve large-scale customers and the small boutique in the pedestrian zone. So, what to do if the costs for cash management continuously increase for retailers? At the end of his presentation, Ulrich Binnebößel called for, among other things, new forms of coin procurement for retailers so as to maintain the choice of the type of payment for costumers at the store.

In this context, he mentioned the first free online market place for coins developed by a Leipzig-based company. The innovative platform provided by the cash logistician ALVARA Cash Management Group AG can be used by any retailer irrespective of the cash-in-transit company to which they are contractually bound or their principal bank. This way, retailers can quickly eliminate any coin shortages and submit their orders from their mobile devices, by smartphone or iPad, as well. Adrian Knoch, owner of easyApotheke from Duderstadt, already uses the online service and concludes, “Now, we can flexibly order our coins online at any time. We have used the ChangeExchange a couple of times already and are very pleased with the experience.” Banks have also recognized the benefits of digital coin procurement. Across the nation, the savings banks in Fürstenfeldbruck, Magdeburg, Eberswalde and Herford as well as various cash-in-transit companies use the ChangeExchange for their clients. In doing so, they offer a digital service which saves them a significant amount of costs and time in coin management.

Therefore, digitalization is one key to reducing costs and establishing more customer proximity in cash management. The next ALVARA INNOVATION DAYS on the topic of cash management are scheduled for September 2019 and will, of course, take place in Leipzig once again.