A recent report from Visa Europe said its number of contactless payments rose by 250% last year and one in seven transactions were done via contactless tech, so it’s little wonder some are predicting the imminent demise of cash.
Unsurprisingly, those declarations don’t wash with Jenny Campbell, CEO of ATM provider YourCash. She points to a report from the Payment Council and Bank of England last year, which revealed cash no longer made up over 50% of payments made for the first time (falling to 48% against 52% of electronic transactions). Headlines said cash was no longer king, but for Campbell the devil is in the detail.
‘The biggest payment method is still cash – the rest, like card, contactless, transfers etcetera are all amalgamated,’ she tells MT. ‘It is reducing slightly and will do as other mechanisms for payments become available for consumers, but the other side of the coin, in my view, is looking at where people are getting their cash from.’
Campbell notes that more cash is going out of machines rather than other channels such as the banks and supermarkets. ‘Cash going out of LINK (a network of banks and building societies) ATMs is going up and up – over £11bn every month, so there’s less overall but more coming out of ATMs as it’s becoming the only access to cash,’ she claims.
Which might explain why Campbell’s not sweating about the future of her business just yet. A former banker, Campbell bought YourCash from RBS via a management buyout in 2010, after initially intending to work at the subsidiary business as director of operations for a couple of years.
‘The business had been grown enormously fast by the founding entrepreneur, but underneath I found a business which I thought was built on sand,’ she says. Campbell decided everything needed repair or reinvestment – from processes to people to policies and procedures and once that was solved, the group asked her to look for a buyer.
Having grown tired of working in such a maligned industry, she was keen on the idea of becoming her own boss. ‘I really lost my motivation as a banker, let alone an RBS banker; my pride had gone out of that role,’ she says. ‘When people asked what I did and who I worked for, I used to be really proud of that until 2008, but from then onwards you kind of mumbled into your wine glass that you were a banker. At the same time my emotional connection to this business was growing bigger and bigger.’
When Campbell started, the firm was delivering around £40m in turnover but losing around £10m. ‘These days we’ve less turnover – just shy of £30m, but we’re driving around £7m profit,’ she explains. YourCash now has a much smaller network of machines but makes more money. It has an agreement in place with the banks, so retailers are provided with a free-to-use ATM and the banks then pay a certain rate per withdrawal. ‘You’ll find my ATMs in Poundland for instance and they recycle cash back to the consumer,’ Campbell explains.
Another early aim in YourCash’s development was to differentiate the firm from competitors – ‘One of our goals was to expand into new countries at the time because we already had a significant business in the UK and knew we could replicate this model in other countries,’ Campbell says. So Belgium became its third country in 2011 after the firm secured a foothold in the Netherlands. Most of YourCash’s competitors are domiciled in the UK and none of them operate in more than two countries. Ireland is next on the horizon and that rollout should take place by the end of this quarter.
The business now has 90 employees, handles around 70 million transactions across its three countries on around 5,000 ATMs and dispenses around £3bn in cash. But what does the future hold?
‘I see independent non-bank operators of ATMs being hugely responsible for providing access to cash for consumers as banks close their fleets down,’ Campbell says. ‘Non-bank operators now control 51% of the UK market and most consumers don’t realise that.’ She feels there’s still life left in cash as ‘1.6m of the population rely on it totally for their daily purchases’, and that other payments will decline first before any significant fall in cash. ‘We’ll go cardless before we go cashless.’