Is self-service killing cash?

Cashless is a trend impacting multiple markets, especially self-service. For example, on the amusement gaming side, many companies are deploying cashless solutions for customers to play games.

When looking at self-service overall, John Clatworthy, SVP, chief customer and strategy officer at Cash Connect, a division of WSFS Bank, doesn't see the industry phasing out cash anytime soon.

"Despite the prevalence of alternative payment methods (card, crypto, digital), cash is still a common and preferred payment method. Self-service provides merchants opportunity to better manage cash and reduce the labor and risk required to support those processes (i.e. cash counting, trips to the bank, etc.)," Clatworthy said in an email interview. "Additionally, many self-service devices at the point of sale allow for the customer to pay with cash and be given change through an automated device."

He also points out that for a self-service device to be "all-in-one" it will need to have many different payment options including cash.

"For complete automation and gained efficiencies across the business, the self-service device would need to incorporate a cash-based solution," Clatworthy said. "According to studies about 20% of the population is unbanked or underbanked and continue to prefer cash as their method of payment."

Modern ATMs are good examples of an all-in-one self-service devices, which can deliver not just cash but a holistic banking experience for customers.

"As FI branches consolidate, ATMs that are conveniently located and offer an array of banking services are critical to maintaining customer satisfaction and solidifying the FIs footprint," Clatworthy said. "ATMs serve as a bridge between the physical and digital channels at a price point that is more compelling than the traditional branch delivery channel. The addition of interactive teller machine functionality at ATMs gives customers the ability to get customer support and ability to achieve a higher touch experience without all the overhead of a traditional branch."

However, there is still the question of card readers at self-service machines, particularly in the amusement sector. A panel at the 2022 Amusement Industry Expo discussed this topic.

"The credit card revenue just completely took us to the next level," Jordan Barberio, owner and vice president at Barberio Entertainment Co., said during the panel. "That's been a huge advantage for us."

Barberio also pointed out that location revenues jumped by 20% when machines installed credit card readers.

However, despite the benefits of cashless, the panelists said they didn't expect cash to go anywhere soon, even with amusement self-service machines.

"Surprisingly here in the U.S., the market has never been stronger on the hardware of the bill," said panelist Jonathan Durst, salesman at Pyramid Technologies Inc. "That was not foreseen."

On the convenience side of the equation, experts see cash as shrinking overall, but not going away, as a panel at the Self-Service Innovation Summit last year discussed.

"I think cash is limited," panelist Andrew Kartiganer, president at Professional Vending Services Inc., said. "Credit is about 75% of our sales, 25% is cash. It's a double-edged sword; there are different problems with both, but I would never eliminate cash. If your (card) reader goes down, that's the only way you're going to collect."

However, there are still issues with handling cash, ranging from security to recycling to time lost spent on sending cash to the bank. On the banking side of the equation, Clatworthy said self-service solutions can improve overall efficiency such as cash automation solutions like cash recycling, smart safes and more.

"Businesses and financial institutions should prioritize tools that decrease the reliance on physical tasks related to cash and payments," Clatworthy said. "While there is a hard cost for cash automation devices and the supporting cash logistic services, like armored carrier pickups and banking fees, the ROI typically outweighs the hard and soft costs associated with managing outdated business processes related to cash. Cash automation at the retailer helps the retailer digitize the cash logistics process and helps financial institutions create significant efficiencies by keeping time consuming cash deposits out of the branches."

Ultimately, the goal should not be to phase out cash but rather to provide a variety of payment options for customers, as Bruce Renard, executive director for the National ATM Council, stated during the SSIS panel.

"We've got to figure out how to keep cash around, keep it strong, while still introducing digital payment methods — and have them coexist and be able to go from one to the other without it being a problem for consumers," Renard said.

The Self-Service Innovation Summit will tackle this topic and more from Dec. 4 to 6 in Miami. Click here to register.