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Why cash is so popular

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Cash or plastic? As the credit and debit card industry stridently predicts the end of payment by banknotes, people around the world are obstinately sticking with the folding stuff.

In Europe, a recent survey by banknote printers De La Rue found that 58 per cent of people in the UK preferred cash as a means of payment, particularly for smaller items.

The World Payments Report found a similar preference Europe-wide, with the value of ATM withdrawals rising from an annual increase of 5.9 per cent in 2000 to 7.1 per cent in 2004.

According to APACS, the cash card industry’s own organisation, some 91 per cent of British payments under £10 were made in cash during 2006, while for payments over £50 there were 700 million cash payments compared with 400 million on credit cards.

Everybody wants banknotes. The demand is reflected in the soaring amount of cash in circulation.

In the US, the $268 billion in circulation in 1990 had risen to $783 billion by the end of 2006.

The euro zone matched this by more than doubling the value of issued notes between 2003 and 2007 – from €103,613 million to €260,000 million.

It is a phenomenon which is as true in China as in the United States; as significant in the Gulf as in the European Union.

The phenomenal growth of ATMs in the tiger economies of Asia underlines the fact that preference for banknotes is not confined to the West.

By 2010 it is predicted that the number of ATMs in China and India will have risen from 125,000 in 2006 to 350,000, pumping banknotes into the eager hands of millions more people.

Such is the demand that in the United Arab Emirates (UAE) the first specially designed ATMs for people in wheelchairs have been installed in Sharjah, bringing ready cash to a new group of users.

Case study: Protecting employees in small businesses


G4S Cash Services (Canada)'s Express Deposit service was developed to service the small/medium business market where employees were used to take cash to the bank.

For businesses who do not generate enough cash to warrant the traditional large-scale armoured vehicle collections, Express Deposit has proved a runaway success as franchisees and stand-alone businesses realise the value of letting the experts handle their cash.

Fast food restaurants and petrol stations have been quickest to see the advantages.

Tim Horton’s, a large coffee and doughnut shop, with over 2,500 locations in Canada, was an early adopter of Express Deposit. Miles Mattatall, the company’s franchise retailer, explained: “After one of our employees had a troublesome incident while making a bank deposit, I signed on to have G4S Cash Services provide the Express Deposit pick-up service for all my stores.

“The peace of mind it affords us and our employees cannot be underestimated. I highly recommend the service to other retailers.”

A low cost alternative to the traditional G4S service, Express Deposit uses a nonarmoured vehicle fitted with a bolted drop safe and is crewed by a single armed guard/driver. The safe can only be opened on return to a G4S facility.

Take-up has been boosted by new legislation which makes an employer accountable for lack of action or failure to ensure employee or public safety.

If an employee is injured while taking a deposit to the bank, his or her boss can be charged under the Criminal Code if a safer means of protecting the employee, such as a CIT service, is available.

So what is it about a bundle of “readies” (ready cash) that triumphs in this electronic era?


The credit card trap


A sinister spin-off for card users is the credit trap which lures the unwary or the unsophisticated into a quagmire of high-interest debt from which it is difficult or even impossible to escape.

In Britain the problem is increasingly acute. One in five card users were still paying for Christmas 2006 as 2007’s spending got under way – and fewer than one in three had cleared Christmas debts when their January bill arrived.

The Bank of England estimated that 12 per cent of households found their unsecured debts a “heavy burden” while the Citizens Advice Bureau (CAB) reported they were approached with 15 per cent more debt problems in January 2007 than a year previously. More than a million bills went unpaid that month as a result of excessive spending during the holiday season. One estimate put the number of insolvencies as the result of over-spending at 10,000.

Debt is now the number one issue for the CAB, accounting for one in three enquiries and equating to 6,600 new debt problems a day.

Small wonder, then, that one in four Britons resolved to avoid credit cards over Christmas. For them Cash was still King, bringing with it peace of mind, solvency and a firm grip on their own finances.

It is a lesson that many have learned, while others have still to learn it – the hard way.

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This page is an edited version of the Keith Blogg article featured in the March 2008 edition of International.
Download the full article: application/pdf Why cash is so popular


Santa Park, Lapland

Even Santa agrees: it’s not a job for reindeer


Santa Claus, as we all know, relies on a small army of helpers, as well as a team of reindeer, to make all his deliveries on time.

One of his most important allies is G4S Cash Services, which keeps bank branches and ATMs topped up with all the cash that is needed for the annual spending spree.

Santa and G4S also work together in Lapland, the Arctic wilderness of ice and snow that is Santa’s traditional home.

Lapland has become a dynamic growth area for tourism with charter tourism rising by 20 per cent annually

In 2006, 60,000 tourists made the trip to meet the white-bearded gentleman himself, as well as his reindeer and husky dogs, and taking a snowmobile ride in deep snow.

The Santa boom – in partnership with Lapland’s growing ski industry – has created a demand for more hotel space and in two years’ time, overnight visitors will number 2.6 million.

It all adds up to millions of euros and pounds which must be transported securely, often across long distances and in atrocious conditions.

In a land where the temperature has been as low as -51ºF and a snow depth of 190 cm has been recorded, the familiar G4S Cash Services (Finland) cash vehicle has needed major adaptations.

CIT vehicles which routinely travel hundreds of kilometres into the Arctic circle are equipped with snow tyres, usually studded, together with extra headlights and, of course, snow shovels. All the vehicles are equipped with engine and cabin heaters.

Kalevi Alaoja, area manager of G4S Cash Services in Rovaniemi, says: “Being an international company, we have benefited from the growth of tourism. The largest entrepreneurs understand the risks involved in cash processing and transportation and realise that having cash logistics professionals deal with their takings is easier and safer than handling it in house.

“The demand for tailor-made cash operations and security services is increasing. CIT operations are exceptionally demanding due to the long distances alone.”

G4S Cash Services, Finland