GS Logo
The Green Sheet, Inc

Please Log in

A Thing

Controlling Cash-in-Transit


Originally published on, February 2, 2004; reprinted with permission. (c) 2004 NetWorld Alliance LLC. All rights reserved.

Managing relationships with armored carriers has long posed a special challenge for ATM owners, because of the relatively low-tech, labor-intensive nature of the cash-in-transit business.

"The universal question I get from ATM owners and managers is 'Can you help me with my carrier relationships,'" said Ken Karant, Chief Executive of software developer Morphis Inc. Morphis' Cash Management (CM) software has always included a sort of "scorecard" for users to track the performance of their armored carriers and to alert them to exceptions such as incorrect cash amounts in ATMs, Karant said. Last year, Morphis created Armored Carrier Management (ACM), a system designed to directly tackle more of the operational issues associated with cash-in-transit.

Devil's in the Details

For instance, ACM reduces the chances of erroneous billing. If a carrier arrives at a store with cash and finds a non-functioning ATM, he'll likely return the next day. "If it's not managed properly, it might be billed as an emergency run, which is obviously more expensive," Karant said.

"ATM owners have been at the mercy of the information provided by carriers. They couldn't verify the data until after funds were settled to their account," said Tyson Nargassans, Vice President of Sales and Marketing for software developer e-ClassicSystems.

About nine months ago, e-ClassicSystems added a new feature called Transaction Warehouse to its ATM Manager Pro software that Nargassans said utilizes data from transaction processors data to help ATM managers better track the whereabouts of their cash. Many, though not all, processors include data on cash replenishments, including the amounts loaded into machines and settled back into owners' accounts with their daily transaction files. Nargassans called these records "the missing link" of cash management.

Transaction Warehouse passes the data along to users and even allows them to set thresholds for overages and shorts, Nargassans said. "If any machines fall outside of the acceptable ranges, they'll be flagged and the ATM manager notified."

Transaction Warehouse also calculates payments to various armored carriers and tracks vault account activity to monitor each dollar through the process, Nargassans said. "It's been very difficult for financial institutions to capture what happens to their cash after their orders leave the bank," said Brian Evetts, Managing Director of Carreker Corp.'s Cash & Logistics business. "It's the black hole of cash management." A number of financial institutions, particularly larger banks, maintain service level agreements (SLAs) with their armored carriers that include penalties for non-performance. Yet, Evetts said, "they didn't have the means to enforce those contracts because they didn't have the means to track their performance."

Carreker's iCom cash management software, which is designed to streamline cash ordering and reconciliation processes, has the ability to communicate with the software systems of armored carriers, Evetts said. Soon the company expects to roll out new products that will more specifically address armored operational issues.

The new products are being driven by customer demand, which Evetts said is growing as central banks around the world seek to offload more of the costs of cash processing onto commercial banks.

Drilling the Data

"The people who manage cash routes do it with paper route sheets that they usually keep sitting in folders on a shelf somewhere. If there's a question, they've got to riffle through the folders and try to find out what happened. It usually isn't until after the cash is reconciled that ATM owners will get some answers," said Ken Cooper, a product manager for Gasper Corp.

Gasper in late November introduced CIT Tracker, which is designed to help ATM owners determine if their armored carriers are living up to the terms of their SLAs. Gasper has provided the CIT Tracker feature to the UK's Abbey National for about nine years. Until more recently, Cooper said, the company didn't see a broader market opportunity.

Following CIT Tracker's "coming out party" at the 2003 Retail Delivery Conference, Cooper said Gasper expects to install the system for its first U.S. client this quarter. Cooper said the necessary data has always been available to Gasper. "When a carrier goes to an ATM and pulls out cassette number one, we get a message to that effect. We've got what we need to track from start to finish whether a complete replenishment has occurred." Yet Gasper and other ATM management systems have largely ignored those kinds of details, he said, because they didn't directly impact transactions or require a service technician to be dispatched.

Gasper initially planned to offer the feature to carriers themselves. However, after a pilot with Loomis Fargo, the company decided ATM owners made a more logical target. Gasper believed ATM owners had better access to the information necessary to monitor their service teams. Also, keeping the solution in-house eliminated the added infrastructure needed for costly IP connections to service providers. Many ATM owners also employ more than one carrier to fill their machines. "It's going to be tougher for an armored company to manage because they're not going to have the information on all of a bank's relationships," Cooper said.

Improving Operations

However, Karant said it makes sense for carriers to handle the bulk of nitty-gritty cash management details. "The carrier touches (cash) last and is the closest to the consumer in the cash trail. It makes sense to keep as much of the data as possible in one place rather than moving it back and forth."

Mount Vernon Money Center, a New York-based armored carrier and first- and second-line service provider, was the first company to implement Morphis ACM, which uses a Microsoft SQL server running Windows NT/.NET. Bob Egan, the company's President and Chief Executive, helped Morphis develop the Web-based software.

Egan said one of the system's biggest benefits is the reduction of data duplication, a common problem in an industry dominated by Excel spreadsheets and homegrown software. "It's eliminated two-thirds of our spreadsheets," said Egan, noting that Mount Vernon routinely entered data into its different systems three to five times, a figure he believes is common in the armored industry. "Once the data is entered, we don't have to worry about integrating all of the different information on routing, service calls and other aspects of our business."

Egan expects to shave several hours a day off the daily task of creating and assigning routes for the 5,000 ATMs served by Mount Vernon, a chore he estimates currently takes up to four hours. "We'll take the existing data on every single process in the system and combine it with orders to create our routes," he said. The streamlined route creation process will make it easier to add new routes, he added.

ACM also creates a higher level of security for armored operations, Karant said. All loaded cash cassettes carry a numbered seal while in transit and in the ATM. "Our database shows every seal issued to a carrier or technician. If he has to break a seal and replace it with a new one, we can track it and find out why. It's an auditor's dream."

"Any questions of integrity are managed with this system," Egan said. "If my operations are safer and more secure, I'm going to translate this benefit to my customers." Sharing access to data concerning their machines with Mount Vernon clients should help him retain customers-and win new ones, Egan said.

Gasper's Cooper believes the time is right for data-driven software that increases oversight of armored operations. "Now that the industry has matured, people are looking at controlling their vendor costs. The need is there and it's obvious," he said.

"In this evolving market, folks are paying more attention to the back office," agreed Nargassans of e-ClassicSystems. "That's the direction everyone is headed."

Original Article:

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.
Back Next Index © 2004, The Green Sheet, Inc.