Deposit methods in today’s cash and coin environment
In today’s depository industry, one open-ended question companies face is which method they should use to process deposits. This especially holds true for companies that take in high volumes of cash and coin, as currency remains ever-present. As banks’ internal costs increase and brick and mortar locations decrease, alternative cash depository methods are on the rise for corporates, in lieu of going to the teller window. Along with offering convenience, these newer methods may be priced more competitively, thus enticing businesses to give them stronger consideration.
Before we jump into the depository methods gaining popularity, let’s look at the two primary traditional methods companies are using today: the teller window and night depository box.
Depositing at a teller window
When depositing at a teller window, some banks offer both an immediate verification and a post-verification option.
With immediate verification, deposits are verified on the spot, and the customer is given a receipt. Any necessary adjustments are completed when the deposit is verified. Some companies do not prefer this method as it takes more time to process and can keep employees away from the store longer. The immediate verification method is also typically priced higher than the post-verification method, as banks typically prefer deposits be processed at a later time to provide a quicker turnaround time at the teller window.
Under the post-verification method, employees deliver a dual-pouch deposit bag to the teller window; however, the deposit’s contents are verified at a later time. The employee is given a receipt indicating the amount listed on the deposit slip, and any necessary adjustments are completed once the deposit is verified. Since post-verification enables customer lines to remain shorter, customers experience shorter average wait times, a component banks are continuously trying to improve. Thus, this option can be seen as a win-win for companies and banks.
One reason companies prefer the post-verification method is it allows the employee to return to their place of business quicker and spend less time away from their duties. Another benefit of the post-verification method is its competitive pricing when compared to the immediate verification method.
It should also be noted that not all banks offer a post-verification option.
Nightdrop boxes are another depository method where bank customers are able to make deposits during or after regular business hours in a depository chute located outside of the branch. The primary benefit of nightdrop boxes is their convenience as they are accessible 24 hours a day. Additionally, customers do not have to wait in line at the teller window. Instead, they simply drop the deposit bag into the chute and go on their way. Another benefit is that banks may also elect to price nightdrop deposits lower than deposits processed at a teller window since they are not immediately verified, similar to the post-verification method previously discussed.
One method gaining popularity is the automated teller machine (ATM). With this method, customers are issued a designated ATM card for their place of business and use this card to make deposits through the machine. Customers can also request more than one card per location. Bills and checks are inserted into the ATM and a total is calculated for the customer. Bill and check capacity vary by bank and ATM models.
A key benefit this method delivers is lower deposit processing fees. Some banks may charge a fee for deposits processed or a fee for currency deposited, but not always both. Customers save on deposit supply fees since bags and deposit slips are not required for ATM deposits. Furthermore, deposit adjustments are also potentially reduced since the ATM verifies all items at the time the deposit is made. Lastly, banks may offer a later deposit cutoff time with this method.
As new ways to deposit emerge, the ATM method seems to be gaining more popularity.
Deposit by mail
One other deposit method on the horizon involves banks partnering with a courier such as the United States Postal Service or United Parcel Service (UPS). With this option, customers send deposits to a cash vault for processing with a courier instead of an armored car company. The fees for using a courier may be less than using an armored car company; however, cash vault fees for deposit processing may still apply.
Smart safes and armored car services
Finally, standard armored car services and smart safes continue to be a crowd favorite among corporate clients. With smart safes, bank customers insert daily deposits into a safe and the company receives provisional credit prior to the safe contents being retrieved by the armored courier. The provisional credit enables companies to proceed with cash positioning and may result in lower borrowing requirements. Smart safe contents are typically retrieved by the armored courier only a couple of times a week. Initially, smart safes were intended for companies that take in high volumes of cash and coin; however, with various models now available, there are different smart safe options for all types of companies and cash intake volumes.
Employee safety and security are the primary reasons companies engage with couriers and armored carriers for deposit processing.
Even though consumers today are depending more on credit cards and smartphones as payment options, cash is still a very popular payment method. Banks are trying their best to offer various options that suit businesses of all deposit habits and volumes. As some banks signal that they do not have the same historic level of interest to service companies that take in high amounts of cash, it is important that they find other ways to accommodate their customers.