One Size Fits All: EPC Initiative to Standardise ATM Infrastructure Increases Efficiency of Wholesale Cash Distribution Viewed 3063 times

21-09-2011 By Leonor Machado – Chair of the EPC Cash Working Group

Expenditures in Europe related to wholesale cash distribution amount to 84 billion euros annually (Retail Banking Research: The Future of Cash and Payments, 2010). The long-term solution to this problem - and a main objective of the Single Euro Payments Area (SEPA) programme - is to incentivise a shift to electronic payment instruments. In the mid-term however, it is necessary to increase the efficiency of wholesale cash distribution based on harmonised processes. In line with this approach, the EPC launched an initiative to standardise the size of automatic teller machine (ATM) cash cassettes and to create interoperability among Intelligent Banknote Neutralisation Systems (IBNS's).

There are almost 400,000 ATMs installed across Europe. The single and multi denomination currency cassettes, which sit inside each ATM's cash dispenser, come in a wide variety of dimensions and sizes. Cash cassettes and ATMs are increasingly protected by IBNS's, which are activated in the event of a robbery or theft to stain the banknotes with ink. Today, IBNS's need to be customised for different cash cassette models and ATM types. This lack of standardisation in the ATM landscape is one of the factors contributing to the substantial cost of wholesale cash distribution in SEPA.

The provision of an open ATM cash cassette standard will decrease maintenance costs. The economies of scale resulting from the introduction of common standards in this area will lead to further cost reductions. Making standard size receptacles available will also allow empty cassettes to be replenished with deposits retrieved from a different ATM in the same locality. This standardisation initiative therefore responds to, and takes advantage of, the trend to deposit cash at ATMs. Last but not least is the environmental benefit; a 'one size fits all' approach allows cash-in-transit (CIT) companies to efficiently store cash cassettes in their trucks thereby reducing the number of cash transport journeys required. Interoperability among IBNS's will also increase the choices of providers active in the cash cycle. These providers will no longer be forced to rely on specific IBNS's compatible only with a limited number of cash cassette models, ATM types and / or ATM cassette delivery cases. Standardisation in this area ensures streamlined procedures when activating or deactivating these systems. As a result, less time and effort is required to familiarise staff with the wide variety of procedures existing today. There is potential for more cost reduction once the needs of different styles for the same system disappear. The funds and efforts dedicated today to manage the variety of models can be concentrated and oriented to new developments - such as enhanced security.

So, what's not to love?

Plenty, say some manufacturers who are getting nervous about development costs (and perhaps increased competition - an inevitable consequence of standardisation). The EPC however, is not calling for a big bang replacement of the current equipment, but a gradual evolution in line with equipment lifecycles. Adapting equipment to the latest standards, functionalities and technology is, after all, the ‘bread and butter' of the manufacturing industry.

As one expert market observer commented in a discussion about the EPC ATM cash cassette standardisation initiative on LinkedIn: "Cassette standardisation - together with workflow automation - is perhaps one of the boldest initiatives from the cash industry this year. Although there are many practical obstacles, as a vision it is compelling.... The issue, as usual in this industry, is on the business side: who would finance the transition and why."

Precisely. So let's get together and figure it out. For more information and related links, please view the article ‘One Size Fits All' in the EPC Newsletter.

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