Is Cash still King? Interview with Simon James

Cash is king. Or so we have been told for many years. It has been the king of assets for many years. Covid-19 tried to kill it. But the king is still right here, alive and well… Or is it? Is it still king? Fintech Review asked a few questions to Simon James, Co-President of PayComplete.

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

Simon James, Co-President of PayComplete

PayComplete is a world leader in cash management technology – both in manufacturing cash-acceptance hardware and developing IoT cash-optimising software.

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

At the core of our business is an IOT platform that helps businesses to 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 partnerships with several cash-in-transit (CIT) businesses allow our customers to optimise working cash and gain preferential credit by ‘banking’ cash takings before it leaves the building.

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

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

I joined our sister company Suzohapp, best known for arcade and slot machines, as its UK MD in 2018. It’s just one of a group of manufacturing businesses that specialise in coin and note processing machines. Each company operated independently, albeit under shared ownership, comprising a group manufacturing ticket machines, parking meters, vending machines and more.

We decided to divide the business into two discrete units. One to focus entirely on the gaming sector. And the other to create a software platform that would use the internet of things to measure cash acceptance and allow businesses to optimise cash movement around the organisation. That business became PayComplete, launching in 2020.

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Before joining PayComplete, I’d spent twenty years working in enterprise technology – mostly in fintech – having started my career in sales. I moved into payments in 1998 with Certegy, which later merged with Worldpay’s parent company FIS.

I later joined fintech Elavon, which helps merchants take card payments by removing many barriers. Clunky and expensive point-of-sale hardware, complicated payment procedures that added cost to each transaction, and advanced data and analytics to give retailers a clear view of financial data across the business.

There has been much innovation in and around digital payments. The same cannot be said for cash, despite being a big pain point for most businesses. Today, when you consider all the operational procedures that come with secure cash management – it’s expensive and complicated.

Is cash still king in the business world?

The Covid pandemic saw many businesses embrace contactless payments in a way we’ve never seen before, and undoubtedly this is a good thing for all of us.

Some retailers indeed stopped taking cash as a payment method during the pandemic. It’s entirely possible that some have not returned to it. But these businesses are very much in the minority because many people still prefer to pay in cash where they can. And don’t forget many people – the unbanked and underbanked – don’t have a choice.

Closing the door on cash payers isn’t good business sense, and you can also argue that it’s socially irresponsible from a financial inclusion perspective.

As far as businesses are concerned, cash is a lower-cost to process. Unlike digital payments, it doesn’t carry any direct transaction costs. Where cash can get expensive is in staff leakage, i.e. theft and human error in cash handling, losses through damaged or fraudulent bank notes and having large amounts of working cash in till floats and in transit. Which is where we come in.

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Automating payments by making them ‘hands-free’ removes theft and fraud. Using the cash movement analytics from our IoT platform allows a business to optimise 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 takings. Freeing up further cash and reducing costs. Finally, separating payment from customer service allows retailers who would otherwise be manually counting notes to focus on other things.

But even considering the back-office cash handling costs, it’s still more cost-effective for retailers overall.

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

Do you think that we are moving towards a cashless society?

We have seen a global shift toward cash-free transactions. Taking the UK for example, cash usage has declined from fifty per cent of all transactions to seventeen per cent between 2010 and 2020, according to the Bank of England.

The pandemic accelerated this trend, with hygiene reasons, the growth in e-commerce and a decline in in-person transactions, and an overall acceptance of cash-free payments after retailers invested in new technology.

But there has been a partial recovery in cash transactions as the pandemic has eased even in the UK, cash is still the preferred payment method for more than a fifth of people, according to the Bank of England (2020), and that number may be even higher today given the cost of living crisis, as many see cash as a vital budgeting tool.

Also, cash usage is far more widespread worldwide despite many people having access to digital payments and still accounts for over US$8.3 trillion in transactions, which is 17.9 per cent overall – according to the FIS Global Payments Report. In 2021, cash accounted for 11.4 per cent of transaction value in the US, 47.1 per cent in Spain and up to 63.4 per cent in some territories – such as Thailand.

Does this mean we will go completely cashless? One day, perhaps, but that does feel a way off, given that it’s the only payment option for some people. For many people, it’s the preference. And as managing cash becomes more cost-effective with data, fewer businesses will have a financial incentive to phase it out.

Any innovation in fintech more broadly that you are really excited about?

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

Plus – and this is the crucial point with any cryptocurrency – its value is not underpinned by a recognised institution. So by definition, it has no actual value other than what other people are willing to pay for it, making it incredibly volatile.

I may well be proven wrong here, but when you couple this with the talk about Central Bank currencies, the individual’s choice may be a thing of the past, and it doesn’t take into account those that still want to use cash, deal with local banks and all the other benefits.

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

We believe our approach of giving customers flexibility and choices with our new range of multi-payment devices at the point of sale and not limiting how people pay 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 improving all the time. As automated cash acceptance hardware continues to be updated, the data we can collect is increasing all time. Not just from the one-million-plus devices we have already in the field. But from the many billions more that will be able to carry our components in coming years, given we hold many of the global patents.

We have a world-class engineering team at PayComplete, both in terms of hardware and software, and we’re barely scratching the surface regarding the data and insights we could offer our customers in future.

More recently, we’ve made a concerted push into the retail sector, launching a new range of automated cash acceptance devices and cash-recycling machines only last month. We’ve designed them to be modular, compact and customisable so a retailer can combine units to suit virtually any environment and even carry advertising if they choose.

Given the growth of retail media, pioneered by Amazon, but now a very healthy revenue stream for stores like Best Buy and Target, where multi-goods retailers can use their omnichannel physical and digital footprint, i.e. stores, websites, and apps to carry advertising – it’s a fascinating area.