Even in a touchless world, cash is king

Issue 1 2021 Security Services & Risk Management

The COVID-19 pandemic has seen a remarkable increase in online trading as people have had to move to ‘touchless-everything’. While online trading is definitely more convenient and quicker, one has to ask whether this may be the turning point that sees the use of cash decline.

A cashless society has been a topic of conversation for many years, but while cashless payment options have exploded, the use of cash has not declined – especially in poorer countries where there are high numbers of ‘unbanked’ people. To find out what’s happening in the real world where cash is still king, and since ATMs are a common source of cash transactions, Hi-Tech Security Solutions asked Russel Berman, sales director at Spark ATM Systems, to expand on what its business has experienced in the past few months and what it expects going forward.

Berman notes, “The decline of cash usage is a topic we are often asked about. The statistics shared with us by the Reserve Bank over the last fifteen years have revealed that cash is a payment method well entrenched in South African society. The share of transactions concluded with cash remains around 88% when measured by volume.

“This means that the competing payment mechanisms introduced into the market have replaced card usage rather than cash usage. This can be seen where e-wallet type products simply see phones replacing cards. This is all a shift within the 12% of card spend in the country.

“Cash will always play a vital role in the informal sector and the taxi industry as the preferred payment method.”

Even being able to draw cash at supermarket pay points has not had a major impact on ATM usage. “Cash back at the till has been an offering of many of the major South African retailers for many years,” adds Berman. “It has never grown in popularity in this country and thus ATM demand remains high. We believe that cardholders prefer the anonymity of an ATM, appreciate the extended hours of service an ATM offers, and prefer to have cash in hand before shopping rather than at the time of checkout, amongst other reasons.”

The future of ATMs

ATMs have been around for years, and there seems to be little improvement in the technology. Of course we now see cardless transactions where people can use their smartphones to draw cash, but are there new developments in the pipeline?

Berman recognises that cardless cash withdrawal is certainly an exciting development in the ATM industry, but notes that the company also has a biometric device that has been ready for market since 2014. “While the technology is easy to implement, we have not been asked for this feature by any of the South African banks.”

Of course, living in Africa means that ATM cash withdrawals are risky due to the insanely high levels of crime. Even when ATMs are placed indoors and are under video surveillance, thefts and muggings still occur. And then there is still the question of hacking ATMs to provide the thieves with easy access to money, as has happened in the past.

Spark ATM Systems has a dedicated risk and security team assessing and analysing both the physical and virtual security of its sites and network. “Our devices and network undergo rigorous testing in order to ensure that we pass the EMV and PCI standards required by our banking partners.”

Talk about the benefits of a cashless society will no doubt continue for some time, however, with even Bitcoin transactions being available via ATMs in certain countries, the ATM as we know it will not be fading into history anytime soon. Similarly, the use of cash will be around for many years, even though there are alternatives. Perhaps the advances in biometric identification will one day make transacting with your fingerprint or via facial recognition too convenient to ignore, but the use of cash and ATMs today is not a factor of technology, but rather a personal preference and even a necessity for many people.

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