retail cash management (rcm)...16. dezember 2013 atm with-drawal atm cash moni-toringbanks money...
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Lukas Zühlke
Consultant Analyst
Self Service & Cash Management
Istanbul, 20/11/2013
Retail Cash Management (RCM)
2 Strictly Confidential
Consulting Services in Europe
16. Dezember 2013
From our offices in Augsburg and Hamburg we give
professional advice to our customers in all of Europe mainly
about:
• Program- & Project Management
• Strategy, new businesses and market entry
• IT-Controlling and IT-Outsourcing
• Risk Management and Cash Management
• mPayment and eHealth
• Tender Management
• Organizational development and –optimization
as well as process design
• (Post) Merger & Acquisition (Integration)
• Banks
• Financial Service Providers
• Retail
• Payment Organizations
Founded in 2007 by Robert Heinz and Michael Stolle
Project Management with and without local cooperation partners
Main offices of SHC
In
du
str
y
Co
mp
ete
nce
Payments Self Service Banking Risk Management e-Health
•The customers pays
for their purchase
•The cash will be
checked for
authenticity and re-
usability. The retailer
gets the credit voucher
on his account
Customer Payment
•The customer can
withdraw money at the
Point-of-Sales.
•The cashier initiates
the transaction, which
will be done by the
Cash Recycler.
•The customer´s
account will be debit
as in a normal ATM
transaction
Cash withdrawal on
demand • The cash stock is
monitored online and
in real time
•Necessary cash
incidents (pick-up,
refilling) will be
activated automatically
and operated by the
CIT.
Logistics
16. Dezember 2013 © 2013 by SHC Stolle & Heinz Consultants GmbH & Co. KG Seite 3
What is RCM?
Now
: 60%
Tendency:
<50%
! N
ow
: 40%
Tendency:
>50%
!
4 Strictly Confidential
Why do we talk about RCM?
16. Dezember 2013
RCM
Online banking
e.g. Paypal Card
Debit Credit
Cheque QR code Contact-
less payment
C2C payment e.g. iZettle Mobile
payment
Banks Retailer
ATM
Bank counter: • Cash Recycler • …
3rd party location
Cash back Cash
C
ash
less
5 Strictly Confidential
Why do we talk about RCM?
16. Dezember 2013
ATM with-
drawal
ATM cash moni-toring
Money order
CIT pick up from
cash center
ATM refill
Banks Retailer
The whole cash cycle process is hardly automated and almost completely separated between banks and merchants
Bringing Commercial Banks, Central Banks, CITs/Armored Carriers, Retailers and Post Offices
together
Payment process
ECR reconcili
ation
CIT transpor
t and logistic
Cash center
reconciliation
ECR prep-
aration
Possible synergies in combining the cash cycle process between banks and merchants are not realized
Seite 6 Strictly Confidential
4 Theses about RCM
16. Dezember 2013
Thesis 4
Thesis 3
Thesis 2
Thesis 1
RCM
Thesis 3: RCM increases the work flow efficiency & minimizes risks
Thesis 2: RCM creates benefits of competitive advantages
Thesis 1: RCM improves processes & supports participants
Thesis 4: RCM shares the cash cycle system & reduces costs
Seite 7 Strictly Confidential
4 Theses about RCM
16. Dezember 2013
Thesis 3: RCM increases the work flow efficiency & minimizes risks
Thesis 2: RCM creates benefits of competitive advantages
Thesis 1: RCM improves processes & supports participants
Thesis 4: RCM shares the cash cycle system & reduces costs
Thesis 4
Thesis 3
Thesis 2
Thesis 1
RCM
8 Strictly Confidential
Cash Cycle Management with RCM
16. Dezember 2013
ATM cash cycle:
ATM
Money s
upply
Money s
upply
Central bank
Deposit
Dis
pensin
g
Retail
CIT company withdraws cash and adds new cash
Employee withdraws from cash register
Customer pays goods
RETAIL: Customer withdraws cash
Banks customer withdraws cash
Cash re-
cycler
Money s
upply
Money s
upply
Central bank
Deposit
Dis
pensin
g
Retail
CIT company withdraws cash partially and adds new cash partially
Employee withdraws from cash register
Customer pays goods
Customer withdraws cash (Retail)
Banks customer withdraws cash
Absorption
Banks customer deposits cash
Deposit
Cash recycler cash
cycle:
Seite 9 Strictly Confidential
4 Theses about RCM
16. Dezember 2013
Thesis 3: RCM increases the work flow efficiency & minimizes risks
Thesis 2: RCM creates benefits of competitive advantages
Thesis 1: RCM improves processes & supports participants
Thesis 4: RCM shares the cash cycle system & reduces costs
Thesis 4
Thesis 3
Thesis 2
Thesis 1
RCM
10 Strictly Confidential
Today‘s Retailers Visionary Solution
16. Dezember 2013
BACK OFFICE FRONT OFFICE
• Installation of front office equipment at
the cash registers
• Installation of cash recyclers for private
and commercial customers in the front
office area
• Installation of ATM in connection with statement
printer and/or money transfer machine
• Screens with targeted advertising
• Possibility of product advertising at
the machine
• Direction of the customer flow
towards the branch
• Publication of locations branch
locator
• Daily cash receipts for commercial
and private customers
• Installation of back
office systems in
stores
• Supply of cash
registers with change
• Disposal of daily cash
receipts
• Automatic counting
and transaction data
transmission to the
accounting system
Interlinking of cash for optimum volume of notes and coins in
circulation
Interlinking of
equipment servicing
Bank
Retailer
11 Strictly Confidential
Benefits for…
16. Dezember 2013
Banks
Increased pressure on interchange level and
missing economy of scale will lead to many
loss making ATM’s
With the use of RCM cash locations a
retail/consumer bank will achieve
considerable cost reduction in the cash
supply for their bank customer
Attractive cash-point network at high
frequency/convenience locations
Cash deposit for consumers
Additional value added services for
customers at cash-points (mobile top up, bill
payment, ticketing etc.) and joint marketing
The possibility of cash-/card payment and
cash withdrawal with cards at the same
“point of interaction” will support gradual
adaption from cash to card payments
Retailer
Operational benefits:
Much faster till opening/closing, handover
Elimination of differences (reconciliation) and cash deficit
Reduced cost of cash logistics e.g. CiT, purchase of coins, bank visits
Fraud and risk prevention:
Increased security in the shops for staff and customers
No cash access by own staff reduces internal fraud
Secure storage of cash eliminates robbery
No counterfeit banknotes acceptance
Additional cost savings or revenue:
Potential revenue share through interchange, DCC, MTU (Mobile top up ) and other value added services
Same value day (cash in RCM belongs to bank) and shift of liability
Seite 12 Strictly Confidential
4 Theses about RCM
16. Dezember 2013
Thesis 3: RCM increases the work flow efficiency & minimizes risks
Thesis 2: RCM creates benefits of competitive advantages
Thesis 1: RCM improves processes & supports participants
Thesis 4: RCM shares the cash cycle system & reduces costs
Thesis 4
Thesis 3
Thesis 2
Thesis 1
RCM
13 Strictly Confidential
Participants in Process Overview
16. Dezember 2013
SERVICE PROVIDER
Frame Agreement Rollout & RCM Program
e. g. Cash Logistics
SLA services
Service Provider Purchase/ least HW & SW
RETAILER
BANK
MANU-FACTURER
CIT
• CR replaces the till for all cash payment
transactions;
the retailer will be exempt from any cash handling
• After the money is stored in the CR it belongs to
the bank, and the retailer has no access anymore
• By storing bills and coins in the CR the money is
validated according to ECB requirements
(counterfeit, fitness, etc.)
• RCM combined with a bank allows merchants to
receive credit for the cash day +1
• Cash Management of the CR is outsourced to a
bank or to its appropriate service provider
14 Strictly Confidential
RCM in practice
16. Dezember 2013
picture: Scan Coin
picture: Glory
picture: Gunnebo
Seite 15 Strictly Confidential
4 Theses about RCM
16. Dezember 2013
Thesis 3: RCM increases the work flow efficiency & minimizes risks
Thesis 2: RCM creates benefits of competitive advantages
Thesis 1: RCM improves processes & supports participants
Thesis 4: RCM shares the cash cycle system & reduces costs
Thesis 4
Thesis 3
Thesis 2
Thesis 1
RCM
16 Strictly Confidential
Business Model RCM
16. Dezember 2013
Service provider offers:
Operation of RCM Systems at high frequency merchant stores on behalf of banks • Trx Processing • Monitoring • Cash management • Maintenance • Asset management • Procurement • CIT management • Customer support • Incident management • IMAC services
Complete outsourcing of merchants cash management process
• Operating the RCM
Systems (as an extension to their ECR and as a replacement of their cash drawer)
• Customer support • Faster credit • Money order for RCM • ECR reconciliation • Security against
counterfeit, robbery and internal fraud
• SLA according to merchant requirements
Banks Retailer
By bringing the cash cycle of retailers and banks together both parties will reduce their
existing costs. With RCM a service provider can offer a solution to realize these savings.
Seite 17 Strictly Confidential
Costs of Cash
16. Dezember 2013
-20%*)
-20%*) The costs of cash for
Banks, e.g. in Germany
are about € 4 bn p.a.
The saving potential for banks is: € 0,8 bn
E.g. Germany: Retailers
spend € 7.5 bn p.a. for
Cash Cycle Management
The saving potential for retailer is: € 1,5 bn
Banks
Retailer
The cost of cash is often underestimated and not very well known
Analyses show that for merchants i.e. the operational costs of cash for a single ECR vary between 200€ and more than 1000 € per month**
*Cards, Karten Cardes, 4-2009; **research@SHC; costs without HW and SW
Saving Potential
Seite 18 Strictly Confidential
4 Theses about RCM
16. Dezember 2013
Thesis 3: RCM increases the work flow efficiency & minimizes risks
Thesis 2: RCM creates benefits of competitive advantages
Thesis 1: RCM improves processes & supports participants
Thesis 4: RCM shares the cash cycle system & reduces costs
Thesis 4
Thesis 3
Thesis 2
Thesis 1
RCM
Get it done with SHC! Reduce your Costs! Think about RCM!
Michael Stolle
General Manager
Lukas Zühlke
Consultant Analyst
SHC Stolle & Heinz Consultants GmbH & Co. KG
Kleine Johannisstraße 20
20457 Hamburg
Tel: +49 40 8894 180 0 Fax: +49 40 8894 180 19
m.stolle@stolleundheinz.com
www.stolleundheinz.com
SHC Stolle & Heinz Consultants GmbH & Co. KG
Kleine Johannisstraße 20
20457 Hamburg
Tel: +49 40 8894 180 0 Fax: +49 40 8894 180 19
l.zuehlke@stolleundheinz.com
www.stolleundheinz.com
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