Podcast: Mastering the fine art of ATM cash management

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Podcast Summary

Managing cash is one area in which we all struggle at times, but for independent ATM deployers, it's a crucial part of their businesses. An understocked ATM, for example, can lead to unnecessary cash-in-transit costs, and an overstocked ATM risks greater losses in the event of theft and the opportunity loss of idle cash.

It's a conundrum that Sam Ditzion, CEO at Tremont Capital Group, a provider of investment banking solutions to the ATM and payments industries, knows well. In our latest ATM Marketplace podcast, he delves into three categories of cash-related costs that independent ATM deployers should consider.

The first is vault cash, which refers to the interest and fees incurred when borrowing cash from a bank or other third party, and these can add up, particularly if you are overstocking an ATM. In most cases, independent ATM deployers borrow cash from third parties, but even when deployers use their own working capital to replenish ATMs, there's still an opportunity cost associated with that cash versus using it or investing it in other ways.

Second, there's getting that cash into the ATM, which generally involves paying an armored courier to replenish vault cash.

Finally, other costs, such as cash insurance, reconciliation fees, bank fees and claims processing fees associated with cash need to be tallied in as well. "All of those costs have soft costs associated with them," Ditzion said. "It's important to account for all of them if you're being honest with yourself about what your true total cost of cash is."

Ultimately, Ditzion said, 10 to 20% of the cost of operating an ATM goes to vault cash while another 10 to 20% goes towards cash replenishment and other cash costs. That's as much as 40% of the total cost of ATM management, underscoring the importance of managing cash effectively.

To learn more about fine tuning ATM cash management, listen to the entire podcast.