Pretoria - As cash circulation grew every year with cash delivery companies and banks handling at least R130 billion cash daily across the country’s economy, more efforts were needed to beef up security and technology in the industry, said Richard Phillips of Cash Connect Management Solutions.
“Research has shown that at least 80 percent of payments were made in cash across the world. If you stopped the cash delivery business, you would throttle the country’s economy to a halt,” Richard, a joint CEO at Cash Connect Management, said after the release of a research on cash-in-transit robberies on Wednesday.
The research was presented by Dr Hennie Lochner, a senior lecturer at the University of South Africa and a former police detective working on cash-in-transit cases. Researchers interviewed 21 convicted cash-in-transit robbers about their crimes. The research profiled the criminals and determined their modus operandi.
Phillips said cash-in-transit robberies spiked in the late 1990s, when there were at least 700 attacks a year.
“The industry realised that the robbers were not ordinary people who woke up and decided to steal R10 000. These were highly organised guys who were ruthless and heavily armed. A month did not pass that I personally did not attend a funeral of a guard,” he said.
The industry, including the banks, then looked into measures to protect the cash and the guards. They invested in training and new technologies on transporting and carrying cash, said Phillips.
Armoured vehicles were remodelled and drop safes and access control in vehicles were introduced, as well as the cash dye devices to protect the money.
“Criminal intelligence was established to protect assets and also help the police to contain the crime. The companies even used helicopters to transfer money to rural areas. These measures acted as deterrents and eventually brought the crime down.”
Phillips said the resultant “greatest single assault” on the cash delivery industry was the decline in service pricing.
“The decline in the service fee against the increase in the risks is prevalent. Fifteen years ago between R115 and R170 was the price for a single day service. If you call a TV technician to fix your signal, you would pay between R700 and R800 for that service. For R170, 15 years ago, you would get an armoured vehicle, fully trained and armed men capable of protecting your cash, collect it every single day and deliver it safely to your clients.”
In 2016, the service price had gone down to between R90 and R107, he said. This translated to losses to the industry that had to contend with at least 80 percent growth in costs in the last ten years, said Phillips.
“It comes as no surprise that some of the companies have in recent years acquired retail cash management services and integrated these into their service portfolios. This has had to come at the expense of an enormous amount of subsidies and one wonders whether this strategy is sustainable in the long run.”
As a result, the cash-in-transit crime was on the increase again, with statistics showing such robberies had increased.
Meanwhile, during the periods when cash-in-transit robberies went down, criminals turned to armed business robberies and burglaries.
“They looked for softer targets. It was a sustained attack on businesses for a long period of time, these are the very customers that the cash industry serves. These attacks stood at 52 armed business robberies a day in 2015,” said Phillips.
The robbers were between five and fifteen in number, fully equipped and armed, and knew what was in the store and how much was in the business vault.
“On business burglaries, where guys wait for business to close overnight and come in through the roof, spend time inside getting what they are looking for, these have increased to 204 burglaries a day according to police statistics. Bombings of business safes and vaults have also increased dramatically in the last 12 months.”
Phillips said the cash market had since been flooded with cash machines that attracted robbers, often handled by inexperienced entrepreneurs with no knowledge about the country’s cash landscape.
The cash service industry’s importance “far outweighed” that of national key points.
“The cash-in-transit industry is grappling with the need to balance profitability and professionalism at every level. These are extraordinary times that require extraordinary interventions. The industry needs full recognition it deserves, as its importance to the state far outweighs, for example, the national key points for which there is a plethora of legislation and control,” said Phillips.
“Minimum service pricing has to grow, and it seems the only solution is to legislate minimum fees for the industry. Cash crimes must be prioritised and dealt with in a collaborative manner between the police, businesses and the justice sector.”
African News Agency