Is Cash Still King? interview with simon james

cash is king. Or so we’ve been told for many years. It has been the king of property for many years. Covid-19 tried to kill it. But Raja is still here, alive and well… is he? Is it still king? Fintech Review asked Simon James, co-chairman of PayComplete, some questions.

Tell us more about PayComplete. What is your elevator pitch?

PayComplete is a world leader in cash management technology – both in the manufacturing of cash-acceptance hardware and the development of IoT cash-optimizing software.

We are best known for our automated coin-operated payment devices, which power most of Europe’s parking and ticketing machines. In recent years, we have expanded globally and vertically into retail, hospitality and other markets. And with an extensive set of patents, we also supply cash management components to many other businesses.

At the core of our business is an IoT platform that helps businesses measure and manage physical payments across the enterprise in smart ‘cash-recycling’ devices. It fully automates cash transactions at the point of sale and ‘smart safes’ that securely streamline back-office cash management.

Our unique partnership with several Cash-in-Transit (CIT) businesses allows our customers to optimize working cash and receive preferential credit by taking ‘banking’ cash before leaving the building.

What is your background and what is the story behind the company?

In a sense, we are a very new company, we only launched our IoT platform in 2020 under the PayComplete brand. It is the core of what we do. But we are also a manufacturing business making cash-acceptance equipment for many of the world’s leading banks and mints since the 1960s.

I joined our sister company SuzoHap, known for arcade and slot machines, in 2018 as UK MD. It is one of the group of manufacturing businesses that specialize in coin and banknote processing machines. Each company operated independently, though under shared ownership, with a group manufacturing ticket machines, parking meters, vending machines, and more.

We decided to split the business into two discrete units. To focus solely on one gaming area. and another to create a software platform that would use the Internet of Things to measure cash acceptance and allow businesses to optimize the movement of cash around the organization. That business became PayComplete, which launched in 2020.

Prior to joining PayComplete, I had spent twenty years working in enterprise technology – mostly in fintech – after starting my career in sales. I moved into payments in 1998 with Certegy, which later merged with FIS, the parent company of Worldpay.

I later joined fintech Elvon, which helps merchants accept card payments by removing many barriers. Clunky and expensive point-of-sale hardware, complex payment processes that add cost to each transaction, and advanced data and analytics provide retailers with a clear view of financial data across the business.

There has been a lot of innovation in and around digital payments. Despite being a huge pain point for most businesses, the same cannot be said for cash. Today, when you consider all the operational processes that come with managing secure cash – it is costly and complex.

Is cash still king in the business world?

The COVID pandemic has seen many businesses embrace contactless payments in a way we’ve never seen before, and that’s undoubtedly a good thing for all of us.

Some retailers actually stopped taking cash as a method of payment during the pandemic. It is entirely possible that some have not returned to it. But these businesses are in the minority as many people still prefer to pay in cash where they can. And don’t forget many people – the unbanked and the underbanked – have no choice.

Closing the door on cash donors doesn’t make good business sense, and you could even argue that it’s socially irresponsible from a financial inclusion perspective.

Cash is a low cost process as far as businesses are concerned. Unlike digital payments, there are no direct transaction costs. Where cash can be costly is in staff leakage, ie theft and human error in cash handling, loss through damaged or fraudulent bank notes and large amounts of cash handled by floats and in transit. Where do we come

Automating payments by making them ‘hands-free’ eliminates theft and fraud. Using cash movement analytics from our IoT platform allows a business to optimize how much cash it uses. Freeing up valuable working capital. Through our partnerships with Cash-in-Transit (CiT) businesses such as G4S, we can offer provisional credit on cash pick up. Freeing up excess cash and reducing costs. Finally, separating payment from customer service allows retailers who might be manually counting notes to focus on other things.

But considering back-office cash handling costs, it is still more cost-effective for retailers.

The British Retail Consortium estimated in a 2016 report that the average retail cash transaction cost is 0.15 percent of retailers’ turnover, compared to 0.31 percent across all payment types.

Do you think we are moving towards a cashless society?

We have seen a global shift towards cash-free transactions. Take the UK for example, according to the Bank of England, between 2010 and 2020 cash use is set to drop from fifty percent to seventeen percent of all transactions.

The pandemic accelerated this trend, with overall acceptance of cash-free payments following hygiene reasons, a rise in e-commerce and a decline in in-person transactions, and retailers investing in new technology.

But there has been a partial recovery in cash transactions as the pandemic eases even in the UK, where cash is still the preferred payment method for more than a fifth of people, according to the Bank of England (2020), and this number could be lifesaving. Even more so today, given the crisis in the U.S., as many people view cash as an important budgeting tool.

According to the FIS Global Payments Report, despite many people having access to digital payments, cash use is far more widespread around the world and still accounts for more than US$8.3 trillion in transactions, accounting for 17.9 percent of the total. In 2021, cash will account for 11.4 percent of transaction value in the US, 47.1 percent in Spain, and up to 63.4 percent in some regions such as Thailand.

Does this mean that we will go completely cashless? One day, maybe, but that feels kind of distant, considering it’s the only payment option for some people. For many people, it’s a preference. And as cash management becomes more cost-effective with data, fewer businesses will have a financial incentive to eliminate it.

Any innovation in fintech broadly that you’re really excited about?

One area I’m less excited about, it will come as no surprise to hear, is D-Fi and cryptocurrency in general. The blockchain technology that underpins it, and NFTs in general, has huge potential, even though right now, the power required to mine it and process transactions makes it expensive, an irresponsible drain on valuable energy, and a carbon footprint. An unnecessary contributor to emissions.

Plus – and this is the important point with any cryptocurrency – its value is not backed by any recognized institution. So by definition, it has no real value other than what other people are willing to pay for it, making it incredibly volatile.

I could be proven wrong here, but when you combine this with central bank currencies, individual choice may be a thing of the past, and it doesn’t take into account those who still want to use cash. Deal with local bank and all other benefits.

What is more important and safe? Is it better to allow more flexible payment approaches, be it cash, card, digital, or a mix of all of the above, than to put that choice back to the individual and not exclude any demographic from the retail ecosystem?

We believe that our approach of giving customers flexibility and choice with our new range of multi-payment instruments at the point of sale is the way forward.

Any plans for the future or product roadmap you want people to know about?

Our IoT platform is still relatively new but it’s improving all the time. As automated cash acceptance hardware continues to be updated, the amount of data we can collect is growing all the time. Not just from the one million plus devices that we already have in the field. But many more than the billions that will be able to carry our components in the years to come, given that we hold several global patents.

At PayComplete we have a world class engineering team, both in terms of hardware and software, and we are barely scratching the surface about the data and insights we can offer our customers in the future.

Most recently, we’ve made a solid push into retail by launching a new range of automated cash acceptance devices and cash-recycling machines just last month. We designed them to be modular, compact and customizable so the retailer can add units to suit virtually any environment and even carry advertising if they so desire.

Looking at the evolution of retail media, pioneered by Amazon, but now a very healthy revenue stream for stores like Best Buy and Target, where multi-item retailers can use their omnichannel physical and digital footprint, ie stores, For carrying website and app advertising – this is a lucrative area.