2 PAYMENT METHOD PROFILES: CASH
Supply Chain Structure Cash Supply Chain
Consumer Actions
Merchant Actions Bank Transfer Armored Transport Actions
Armored Transport - Change Delivery
Bank Cash Vault
Armored Transport Branch
Self Service
United States Mint
Drop Safe
12 Federal Reserve Banks
Walk to Bank
Bank Branch
Note Validation
Cash Office
Consumer
Bureau of Engraving and Printing
Smart Safe
Cash Validation
ATM
Recyclers
At Cash Vault
3 Physical Transfer of Cash
1 Consumer
2 Outlet
4 Cash Vault
5 Value
Figure 2.1
Cash is generally labor intensive for merchants and banks to process, transport and handle. At the merchant outlet level, notes and coins must first be validated at the cash register, where they are typically stored until they are placed in a safe at the on-site cash office. There are several different types of safes a merchant may use, from basic drop safes to “smart safes”, which can validate notes and coins and some banks may even be able to offer merchants provisional credit once notes and coins enter the safe. For large format outlets, there are also cash recyclers which can accept and validate large volumes of notes and coins and may even be able to store and dispense change. There are three basic options for the physical transfer of cash. Firstly, a merchant can employ an Armored Transport (AT, sometimes known as Cash in Transit) company to collect the cash on a pre-agreed schedule. The schedule is likely to depend on factors such as the volume, denominational mix and consistency of cash received, the prevailing interest rate (or the opportunity cost of keeping cash on site), physical safe capacity limits, insurance limits and security considerations. The store’s location can also determine days of service and even cost: very rural areas sometimes do not have Armored Transport service available, and if they do, it’s often more costly and has a very limited pick-up schedule. From here, the cash is typically taken to an AT branch (sometimes known as a depot) and then to a cash vault (sometimes known as a cash center, vaults can be owned by either banks or AT providers) where notes and coins are processed, verified and value is ultimately credited to the merchant’s bank account.
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