Treasury Today Country Profiles in association with Citi

Smart cash solution for the UAE

Close up of AED 500 notes in a vintage treasury box with islamic rosary

A new solution from Transguard and Standard Chartered looks to remove some of the pain corporates have when handling cash in the UAE.

For corporates around the world, the collection, handling and depositing of physical cash is a pain point.

This is especially so in the United Arab Emirates where physical cash remains an ever-popular means of payment. Indeed, numerous studies have highlighted that notes and coins account for around 75% of transactions in the country. As a result, even digital native companies like Uber are being forced to accept cash in order to meet consumer payment expectations.

Corporates in the UAE are therefore demanding solutions from their banks to alleviate the challenges associated with handling cash. And it is this that is behind the Smart Cash Deposit solution offered by Transguard in partnership with Standard Chartered.

Smart cash deposits

In brief, the Smart Cash Deposit solution is a machine that enables a corporate to deposit its cash balances in its offices, negating the need to take the cash to a physical branch. Upon depositing notes into the machine, corporates get credit into their account within two hours. The machine can accept and sort 200 notes at a time and the biggest machines are able to hold up to 10,000 notes. However, it is very unlikely that users will ever fill the machine, as once it is at 80% capacity a message is pinged to Transguard who come and empty it.

According to Motasim Iqbal, Managing Director, Head Transaction Banking UAE, Standard Chartered, this offers numerous benefits to clients. “By depositing the cash into a machine in their offices our clients no longer have to worry about the logistical and insurance issues around handling cash and transporting it to a branch,” he says. “This reduces the cost of handling cash massively.”

Moreover, in offering intraday credit, Iqbal states that there is an increased working capital benefit as very little cash is left idle. The Transguard portal gives real time visibility and ERP will get updated once a day via MT940.

A solution for all

With the cost of implementation and upkeep of the Smart Cash Deposit machine based on the size of machine that is selected, Iqbal states that there are some clients who cannot afford this or don’t have the quantum of cash payments to make it a viable solution.

Yet the bank has worked to make sure these corporates can still benefit by installing the machine in a handful of its branches. “We can onboard our customers on these machines and then they can come to the branch and deposit their cash, receiving many of the benefits they would if they were doing it on premises,” says Iqbal.

This also helps the bank branch be more efficient. “Cash depositing is one of the most time-consuming tasks for our branch tellers,” explains Iqbal. “we have received good feedback from our clients that the smart cash solution has dramatically reduced the time to deposit for them.”

Although it is one of the first for SCB, Iqbal says that the success of the solution in UAE has caught the attention of other countries where cash remains king and it may be replicated where applicable.

Focus on digital

If regulators, corporates and indeed banks in the UAE have it their way, the Smart Cash Deposit solution will have a limited shelf life as the country pushes digital forms of payment. Indeed, there are plans afoot to make the UAE a near cashless society by 2021.

Banks like Standard Chartered are also helping drive the digital agenda. As Iqbal explains: “We have recently stopped accepting faxes and we are pushing our clients onto digital payment rails. These are important steps as it helps drive efficiency and cut costs – as well as a host of other benefits – across the full financial ecosystem in the UAE.”

But the movement away from cash will take time and it is unlikely that it will be fully removed in the short term. Corporates therefore may wish to begin – if they haven’t already – exploring solutions like this from Transguard and Standard Chartered as a means of managing physical cash more efficiently.

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