How Does a Cash Recycler Work?
A cash recycler is an amazing wonder of technology, even to those of us in the business. I am reminded when I am on-site for installs, when those first few transactions happen, the wow factor that comes over the staff and myself seeing the machine in action is palpable. So, how do these wonderful machines work?
The Basics of a Cash Recycler
At its simplest definition, a cash recycler is a vault that handles cash coming in and cash going out for both teller transactions and vault transactions needed in the teller line or POD environment. The efficiency begins with the fact that money is only counted once by the machine, versus typically 3 times by a teller.
A cash recycler stores money, sorted by denomination typically in 2 ways, either RSM storage (which stands for Roll Storage Module) or cassettes (think like your ATM). Each of those storage configurations has their pros and cons.
Cash recyclers are capable of taking cash in, authenticating the denominations, checking for suspect bills and then storing the cash for later transaction use. They are also capable of dispensing cash for transactions like cashing checks or account withdrawals in any denomination mix that the customer may desire. Therefore by storing the cash that comes in from commercial or retail accounts and giving that same cash back out, you are “recycling” your own cash instead of shipping and ordering from the FED or your armored car provider.
How Efficiency is Gained
One of the major efficiency gains of using a cash recycler is dramatically reducing vault transactions. Traditional environments require tellers to maintain minimum cash levels and not to exceed maximum cash levels to mitigate risk. So therefore when a teller is low on cash or high on cash, they have to buy or sell from the vault.
This transaction requires “dual-control” in authenticating the cash and usually involves the head teller or teller supervisor. This type of transaction removes 2 people from being able to serve customers, and puts them off the line for 5-10 minutes in most cases. By having a cash recycler, you are putting the vault between two tellers, with a much higher level of cash management available.
In a normal environment, for those two tellers a recycler can eliminate any need to sell or buy from the vault during the day. In addition to the two people hooked up to the recycler directly, other tellers who may still operate out of drawer can buy from or sell to the recycler in single control. The elimination of vault transactions requiring 2 people and happening off the line is a roughly 90% efficiency gain.
Secondly, and what most people buy cash automation equipment for, is speed and accuracy on every single cash transaction. The average time savings on a cash out transaction ranges from 30-45 seconds. For example, in most environments on average, it takes 45 seconds from the time a teller opens the drawer, until the customer has the money correctly counted back in their hands. In an automated world, this takes roughly 8 seconds.
Also, since the machine is counting the money instead of a person, mistakes are eliminated and speed is increased. Likewise on cash in transactions, the process is dramatically sped up because there is no need for sorting and validating of the notes by the teller.
The recycler can handle mixed cash, in any order, process it quickly (on average 5-7 notes per second) and return the validated total to the teller. In the meantime, the teller can either be processing checks in the deposit or talking with the customer about their needs and trying to cross-sell.
One of the key advantages of automation is the teller can stay focused on the customer and their needs instead of counting to ensure they are in balance. If cross-selling is a major part of your strategy to drive revenue going forward, you need to consider what tools will enable the tellers or universal bankers to do their job and stay client focused.
How to Drive ROI with a Cash Recycler
We have explained a few of the ways that a cash recycler generates efficiency and opportunity for your tellers. If want to know more about the operational impact of recyclers, I recommend you check out our recent articles: How a Cash Recycler Helps My Teller Line Operate Better and 3 Reasons FIs Need to Automate Their Teller Lines.
Lastly, how do you drive a competitive ROI to justify investing in cash recyclers? The general rule of thumb is 2 people working off the device can do the work of 3. So for busy locations, you can either reallocate staff to more profitable roles, or you can implement universal staffing models.
Read our article where we outlined the benefits of implementing universal tellers. You can take total staff from maybe 7 or 8 between tellers and CSRs to 4-5 universal bankers. Most CSRs are more than willing to jump on a recycler and help for a peak time, than having to go get a drawer out of the vault and balance it at the end of the day.
With all of the efficiency gained from vault transactions and well as speed and accuracy improvements, plus start of day and end of day times dropped to 2 minutes on each side of the day, it’s very possible to do more with less. Most clients write the recycler off on either a 5, 7 or 10 year depreciation depending on their tolerance for writing capital equipment off. With a general useful life of 10 years for most recyclers, it’s a very effective way to reduce operating costs with handling cash.
Learn More About Cash Recyclers
We've compiled a list of resources for you to reference in your quest to learn more about cash recyclers:
- Cash Recyclers: The Best Investment to Improve Branch Operations
- How Much Does a Cash Recycler Cost?
- 3 Concerns in Implementing Cash Recyclers
- High Capacity Cash Recyclers: Glory RBG-100 vs CIMA 7016 vs MoniSafe 500
If you know that a recycler would improve your operations but are unsure which product to choose, read some of our product comparisons and success stories to help you determine which machine is right for your organization:
- Product Comparison: The Hyosung MoniSafe 500 vs. The ARCA CM18
- Comparing the Glory RBG-100 & Nautilus Hyosung MS500 Cash Recyclers
- The Vertera Cash Recycler vs CIMA 7016 Cash Recycler
- Carolina Collegiate FCU Sees Immediate Operational Improvements with Cash Recycler
- Jetstream FCU Differentiates Branch Experience with New Design and Technology
To learn more about how Cash Recyclers can improve your business operations, check out our free infographic here.
About Sean Farrell
Sean has been in the business since 2003 and always aims to be an expert on whatever solutions QDS is providing. Sean has grown into a thought leader in the space through research and company growth. Sean holds strongly to his Christian faith and uses those principles to guide the business.