retail cash management (rcm)...16. dezember 2013 atm with-drawal atm cash moni-toringbanks money...

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%

!


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


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


4 Theses about RCM

16. Dezember 2013





Thesis 4

Thesis 3

Thesis 2

Thesis 1

RCM


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:


4 Theses about RCM

16. Dezember 2013





Thesis 4

Thesis 3

Thesis 2

Thesis 1

RCM


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


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


4 Theses about RCM

16. Dezember 2013





Thesis 4

Thesis 3

Thesis 2

Thesis 1

RCM


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


RCM in practice

16. Dezember 2013

picture: Scan Coin

picture: Glory

picture: Gunnebo


4 Theses about RCM

16. Dezember 2013





Thesis 4

Thesis 3

Thesis 2

Thesis 1

RCM


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.


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


4 Theses about RCM

16. Dezember 2013





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

[email protected]

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

[email protected]

www.stolleundheinz.com

retail cash management (rcm)...16. dezember 2013 atm with-drawal atm cash moni-toringbanks money...

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