If you run a business that deals with large volumes of cash, you need a safe and secure trading environment, and the ability to access your working capital quickly. In other words, says Cash Connect's CEO Steven Heilbron, you need to figuratively move the bank to your store.
From the vault
- A safe and secure environment
- Guaranteed business continuity
- Fast and cost-effective payments functionality
- Capital to grow your business.
South Africa is still largely a cash-centric economy. A recent report shows cash usage in South Africa as a percentage of the GDP is 58,2%. “Cash continues to be the trusted and most widely used payment method in the country, accounting for well over half of consumer transactions being paid in cash,” says Steven Heilbron, CEO of Cash Connect. “Cash is instant and accessible. It’s easily exchangeable. And so, in a South African context, cash remains king.”
In South Africa, the current cash in circulation is approximately R135 billion, having grown from R119 billion in 2014, according to the South African Reserve Bank.
The Retail Cash Crime Landscape
Since banks have hardened their security, criminals have shifted their focus to the cash-in-transit industry. As the CIT industry hardened itself, focus moved to the next soft and most vulnerable target dealing with large quantities of cash: Retailers.
According to the latest SAPS crime statistics, South Africa has at least 55 armed robberies against retail businesses each day. This translates into over 20 000 armed robberies a year. A further 71 195 business burglaries, also in pursuit of cash, were reported in the last year. While cash is still king, it certainly remains high on the criminal agenda.
The Genesis of Cash Connect
With the knowledge and experience of working in the cash-in-transit industry at the time when CIT heists were rife, Cash Connect was born. The business started with identifying the cash crime shift to the retail industry. “We decided to figuratively move the bank into the retailer’s store,” says Steven.
“Our purpose was to create a safe and secure trading environment for retailers. We achieved this with our range of robust cash vaults, which are built to SABS Cat 4 standards, giving retailers an immediate risk transfer. The minute a retailer deposits their cash in a Cash Connect vault, their cash is guaranteed.”
Over the years this offering has evolved as Cash Connect’s understanding of the SME space and its needs has deepened. “In addition to creating a safe and secure trading environment and removing the cash risk for the retailer, we ensure that retailers can be settled on the same day, providing working capital a lot quicker and allowing for business continuity,” says Steven.
Cash Connect takes the cash risk. Whether or not cash is stolen from a CIT vehicle on route to a cash centre, the retailer’s cash has been guaranteed and settled.
“If a retail store gets hit in pursuit of its cash, often a lengthy insurance claim can leave a retailer in a vulnerable position, being unable to replenish inventory levels or meet working capital demands,” says Steven. “With Cash Connect, a retailer is safe and secure, working capital is received on the same day and business continuity is guaranteed.”
“By working with our clients who are SMEs, we understand their businesses and the vital role they play in our economy. To date Cash Connect’s annualized forecast is that we will process in excess of R75 billion on behalf of our retail client base. This has put us in a unique position to provide an offering that extends Beyond Safe.
“Now we provide retailers with growth finance in the form of working capital, boosting their businesses with an often much-needed cash injection. The business capital offering is fast, flexible, hassle-free, and unsecured. As an alternative financier for SMEs in South Africa, we understand the need for quick access to unsecured growth finance.
“For example, Cash Connect recently advanced R1,8 million of growth finance to one of its retail supermarket clients, within an hour of the application being received. This is what these types of retail businesses often require,” says Steven.
“Because we understand the retail space and our clients, we can provide them with this capital to grow, thereby giving them a competitive advantage. Retailers can use this cash injection to open a new store, facilitate the purchase of a new property, renovate their store, repay or create a shareholder loan or make use of bulk purchases at discounted rates. Our growth finance is also used in acquisitions, i.e. purchase of a fuel station or a chain of stores.
“Ultimately, it’s crucial for a retailer to turn inventory into cash and cash into inventory as fast and risk-free as possible. To meet this need, Cash Connect offers retailers capital to grow their business, robust technology to create a safe and secure trading environment and a risk transfer on the dropping of cash into the vault.
"Cash Connect’s offering ensures continuity of businesses against attacks, access to payments to suppliers directly off the vault, and a quick mechanism to complete the working capital cycle with same day value on daily cash takings. We take retailers from a place of safety to a place of growth.”
Cash Connect’s offerings provide retailers with business efficiencies that allow for significant financial benefits. “Retailers no longer need to worry about cash shortages that stem from the manual counting and reconciliation process. More hands on money means more risk, more people involved and of course more overheads. Retailers can save on overheads, salary costs and can now re-deploy staff to help run the business, saving both time and money.”
Security and Financial Benefits
From a security perspective, clients enjoy a safe and secure trading environment, guaranteed cover of their onsite cash, and removal of the cash-in-transit risk.
From January to May 2018, South Africa saw its worst cash-in-transit epidemic. With a record figure of 142 CIT heists in 140 days. These attacks were aggressive and dominated South African news and social media platforms. But, amidst all of this, Cash Connect clients were immune from losses resulting from this epidemic. Why?
“Because Cash Connect offers an immediate risk transfer from the moment the retailer deposits the cash into the on-site Cash Connect vault,” says Steven. “Our cash vault technology, which is designed and manufactured locally, has been proven to be the most effective deterrent in the local retail market.”
The financial benefits of Cash Connect’s solution are multiple, offering retailers quick access to working capital, the ability to facilitate payments directly to suppliers from the vault and capital to grow their business.
“We have a compelling settlement service compared to credit cards and debit cards. We provide same day value, full risk cover on site and in transit, all for the cost of approximately 0,6% based on R1.5million turnover.
“Given that cash is still the dominant payment mechanism of choice in the country, it is difficult to understand how any business that deals with large volumes of cash can do so without robust and efficient automation. The myth that automating cash handling processes is expensive, is simply not true. The math speaks for itself. In fact, automation significantly reduces risk and cost.”
Passion for people and businesses
“SMEs are the lifeblood of our economy and play a critical role in the future of our country. We are determined about enabling South African retailers to reduce their risk and grow their businesses.
“The genesis of Cash Connect is that we have evolved from an initial focus of providing a secure trading environment to going well beyond safe. Our focus and purpose is targeted at enabling the growth of SMEs in South Africa.
“We will continue to evolve, while the nexus of our journey will remain the passion we have for our clients and their businesses.”