A close-up shot of a full cash register with paper money and coins.

Cash Remains Key for Consumers and the Economy


While cashless payments have grown in recent years, here's why cash remains king for consumers and the U.S. economy.

While the availability and use of cashless payment options have grown in recent years, several demographics in the U.S. still rely heavily on cash. Twenty-two percent of the U.S. population uses cash as their primary payment method. From young people who work jobs where they’re paid in cash to the elderly who tend to use more cash, many people still rely on cash to complete their daily transactions. This makes cash a critical payment method for millions of Americans and a vital part of the American economy.

This continued relevance of cash heightens the need for retail companies to refine their approach to cash logistics. Doing so can help businesses gain important performance insights and plan for the future.

Cash Logistics: From Reactive to Proactive

Handling, counting and depositing cash is often a time-consuming and expensive activity for retail businesses. For instance, a franchisee with three restaurant locations may pay 72 hours a day in labor to operate their locations. Eliminating even two hours of labor, which is used to count, reconcile and deposit cash, would be impactful. Therefore, taking a proactive approach to cash logistics can help reduce many of the inefficiencies present in traditional cash handling processes.

The first step for companies looking to improve their cash handling processes is evaluating those processes with the following criteria:

  • Cash touchpoints. Review your cash handling processes to determine how many people are touching cash throughout the cash cycle. The key to good cash logistics is limiting the number of people handling cash. Limiting the number of touchpoints for cash enhances loss prevention and reduces the amount of time employees spend counting cash and, freeing them up to do more customer-focused work.
  • Cash automation. Determine which parts of your cash logistics can be automated. Solutions like cash recyclers, which accept and dispense cash, while also storing it and keeping an accurate count of cash on hand, remove manual cash handling from the cash cycle and improve employee productivity. The ‘cash-in, cash-out’ model not only helps with loss prevention, but also provides accountability at the cashier level. Smart safe technology is another tool companies can use to improve cash logistics. Like cash recyclers, smart safes automate parts of the cash handling process. Instead of accepting and dispensing cash, smart safes, which are connected to the internet, allow businesses to deposit cash with their bank quickly.
  • Advance Access to Deposits. When leveraging these innovative solutions, you also get accelerated deposits to your bank account even while the funds still sit in your business location. Gaining access to this working capital can be extremely valuable in obtaining the utilization of your profits. These solutions use Armored Couriers to move the funds to the physical vaults when necessary. Schedules are established based on cash volumes for a retail location.

Business Benefits of Sound Cash Logistics

Good cash logistics benefits don’t end with improved loss prevention and faster access to working capital. More streamlined and automated cash handling can provide companies with several insights to help them make more data-informed planning decisions.

  • Centralized reporting. Automation tools like cash recyclers and smart safes help companies manage cash on hand and can provide detailed, centralized reporting. This centralization gives companies a single source of truth and a clearer picture of their cash position.
  • Relevant data. Cash automation solutions can also provide data to help businesses analyze performance and forecast and plan for the future. Access to current and historical data, across multiple business locations, enables corporate headquarters to determine any processes they might need to update.
  • More time to focus on customers. In addition to its other benefits, improved cash handling can enhance employee productivity and customer service. Eliminating time-consuming manual cash handling frees employees to focus on selling products and engaging with customers. With the increased need to provide a more hands-on customer experience, leveraging technology will become an essential tool for companies to consider.

Cash Handling Trends to Watch

The economic disruptions of the pandemic have made good cash handling processes more critical than ever. Several trends offer insight into the future of cash logistics.

  • Cash logistics moves out of the back office. As businesses manage larger amounts of cash, one growing trend has been the movement of cash handling from back office to front capture. With traditional back-office cash handling processes, multiple people may be touching cash. Still, with front capture, customers deposit cash directly into a cash recycler, reducing touch points and keeping cash secure.
  • Store-friendly hardware. As retailers – including large ones like Walmart and Target – have adopted cash recycling, hardware, manufacturers are creating more store-friendly models. Manufacturers are adapting their solutions to make machines like smart cash recycling devices so that retailers can have the space to sell more products.
  • Tailoring labor needs. With the increased adoption of cash automation solutions and the efficiencies they bring, retailers are beginning to reevaluate how they use labor on a day-to-day basis. The move away from manual cash handling is leading many businesses to think more strategically about the tasks they want employees to spend time on.

The Future of Cash

In recent years, there’s been increased conversation around the possibility of the U.S. soon becoming a cashless society, but there’s plenty of evidence to suggest that such talk is premature.

Several factors point to cash’s continued importance. First, most small transactions – those under $25 – are still completed with cash. Additionally, 25 percent of U.S. households remain unbanked or underbanked. Finally, the COVID-19 pandemic saw an uptick in cash use, which is consistent with findings from previous economic downturns, which also saw increased use of cash. The Federal Reserve has reported that cash processed in 2020 was up 16% over prior years’ volumes.

Beyond statistics, there’s still a significant tradition attached to using cash. Cash serves as a security blanket for some people. Many consumers view using cash as a reliable way to control their spending and manage their budgets.

Cash remains an integral part of the economy, especially for retailers. Businesses that develop a systematic approach to cash logistics can gain better insight into their cash position and a competitive advantage when planning for the future. For additional information on cash handling, contact your Treasury Management Officer, Relationship Manager or Find a Banker.

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