Article

Cold, hard cash

Credit and debit transactions might be on the rise, but cash isn't going anywhere - in order for most kiosks to reach their potential, they still need to accept bills and coins. But increased numbers of foreign currencies, poor quality notes and the ever-present scourge of counterfeiting make handling cash tougher than ever.

July 10, 2005 by James Bickers — Editor, Networld Alliance

If the zeitgeist is to be believed - and sometimes it is, sometimes it isn't - we are only moments away from a paperless, cashless society, a society in which virtually everything but our bodies is reduced to ones and zeroes. PDAs will forever replace old-fashioned schedule books, e-mail will forever supplant written letters, and plastic will doom paper money to the Graveyard of Obsolete Things.

Of course, the zeitgeist has been saying these things for some time, and it simply isn't happening.

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"We've been hearing from pundits for years that the cashless society is just around the corner," said Jason Siemens, solutions architect for NamSys, an Ontario firm that develops products and services for cash handling and management. "But this so-called antiquated payment system continues to be used for three-quarters of all payments. Ambitious electronic purse products touted in the 1990s have completely vanished from the market. And while debit and credit card use continues to increase, this has mainly served to reduce check use."

Siemens also pointed to simple human nature as one reason why the death of cash is unlikely.

"All major electronic payment systems record the payee and details of the transaction," he said. "This information may be stored indefinitely and used to direct-market products to you and your family. This fact alone is enough for some people to embrace cash."

The challenge of the crinkled bill

Essential though it is, cash-handling capability can be one of the toughest parts of a kiosk design. Money, after all, is an analog product in a digital world, and one that can easily become physically damaged or otherwise rendered unrecognizable.

More research on these key terms: Currency Bill acceptors Counterfeit

"Cash-accepting devices have a fundamental dilemma," said Aubrey Meador, vice president of sales and marketing for Hillsborough, N.C.-based ArcaTech Systems. "The mechanism must be able to accept a high percentage of notes of widely ranging quality, but with the ability to recognize counterfeit bills. Once the recognition problem has been addressed, the reliable physical handling of the notes creates the biggest problem for automatic bill acceptors. Folded, torn, mutilated and worn currency present the biggest problems."

If everyone kept their cash neatly folded in a crisp wallet, bill acceptors would still have the challenges of recognition, counterfeit detection and simple inventory management. Of course, most money moves from one pocket to the next, collecting wrinkles, tears and the marks of vandals in the process. This introduces an enormous variable into the kiosk design, one that can cause the operator's worst possible outcome: downtime.

MEI's Series 2000 Combo Acceptor can accept both cash and plastic.

"For a cash acceptor to be a success within a kiosk it needs to enjoy a high uptime," said Andrew Osborne, global marketing manager for the retail division of West Chester, Penn.-based MEI. "Unfortunately, coin and bill acceptors can experience jams, and when this happens the ability for the kiosk to accept further transactions is impeded, and an expensive call-out by a service technician to clear the jam is required."

Osborne said that the currency acceptor is one area of kiosk design where you truly get what you pay for, and skimping is not an option.

"Build in quality," he said. "It will undoubtedly save you money, and improve customer satisfaction and usage rates. Â… A good quality component always pays for itself."

He also urges designers and deployers not to discount the importance of a coin acceptor. "Remember the more options provided to the customer, the more likely they are to be able to make that impulse purchase," he said.

Siemens urges an emphasis on security when designing a cash-handling device - a proper safe is essential, especially given that most kiosks operate in a 24-hour environment. Balancing this need with the desire to minimize footprint makes for a tough juggling act.

Keeping a global focus

What's Important Cash is still a widely used and largely preferred payment method, despite the rising popularity of credit and debit cards. Uptime is crucial - given the security issues surrounding cash, non-functioning bill acceptors require a service call, which creates downtime and costs the operator money. Currency-accepting technologies need to be refreshed and updated from time to time - not just to accept new global currencies, but to detect new counterfeit methods.

Compounding the issue is the geographic nature of money - cash looks very different depending on where you are in the world. Despite all the talk of a "global economy," currency is still decidedly regional.

This means that kiosk designers need to make some big decisions on the front of a project about what currencies will be accepted, and how new ones might be added down the road.

"Many cash acceptors are great at handling U.S. currency, or perhaps European denominations, but there are few that have truly global abilities," Osborne said. "Add to the mix the need for coin and note acceptors to both have this ability, and you narrow down the field quite considerably. New notes and coins are being issued with increased frequency by the world's banks as part of their continued efforts to deter the fraudster."

Osborne said that MEI's acceptors are built upon a modular design - using remote management, a kiosk operator can easily update the device to accept new currencies.

Meador added that even if cash from nationalities can be properly accepted, the road is even tougher for devices that need to give change in more than one type of currency. "Multiple devices within one kiosk may be required to accomplish this task," he said.

Fighting fraud

To any business that accepts cash for products or services, the threat of counterfeiting is always looming at the back of every transaction. As unattended devices, cash-accepting kiosks must include basic protections against bogus bills - and given the ever-escalating nature of the fraudster's arsenal, those protections must constantly be improved. That means if the fraud protection on your cash-accepting devices hasn't been updated or checked for vulnerabilities lately, it is time to do so.

Siemens said that NamSys's products incorporate ultra-violet and multiple magnetic sensors, "the same technology used in the cash processing centers of the major banks," he added.

"(As long as there is) perceived value in doing so, counterfeits will continue to be produced, and of course they become ever-more sophisticated," said Osborne. He said that his company works to maintain close relationships with both banks and law enforcement, ensuring that "kiosk operators are always one step ahead."

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