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Cash is still a growth business

Category: Finance,Retail

"People talk about the cashless society for real reasons. There is real new technology that is coming into the market," Phillip Cook said. "But there is an interesting, false correlation where people say, 'Look, Brink's is not able to grow like they used to because people are not using cash anymore," Cook said.

Conversion to mobile payments "won't just happen overnight," Brink's CEO Pertz said.

Alphabet CEO Sundar Pichai remarked on the tech giant's recent earnings call that a big growth opportunity is payments in emerging markets. "We do see unique opportunities in these markets ... payments as a good example. And you've seen us address that exclusively with Google Tez in India. And so we will look to do more like that. ... There is a lot of innovation, which is going to happen from these countries, both for their own markets and for the world beyond. And we want to be in a position to do that well."

Apple Pay has been dogged by criticism about a much slower-than-expected adoption rate — "a hell of a lot slower" than anticipated, Pertz said — but its use tripled in Apple's most recent reported quarter from a year ago. Apple CEO Tim Cook called out Apple Pay's growth in the recent earnings: 24 global markets, 4,900 banking partners and "well over 1 billion transactions last quarter, triple the amount from just a year ago." Cook said it was more "mobile" transactions than "great companies" like PayPal are doing, but overall PayPal conducted 2.3 billion transactions in the quarter ended June 30. Gross payment volume at Square was over $21 billion in the second quarter.

PayPal's Schulman told the Times that "people are slowly but surely moving away from cash."

"Maybe cash isn't shrinking, but is going to be gone in 20 years. I don't know when. Certainly long-, long-term there are headwinds," Phillip Cook said.

Pertz is thinking in terms of multiyear financial targets rather than looking out decades.

World events also can send a sudden reminder of cash's critical role in the every day, even at a time of rapid innovation. "Look at Puerto Rico, where all the ATMs went down for days," Pertz said. "We rushed in with some competitors, truckloads of cash to help the society continue to operate. Federal regulation requires that all banks have a certain amount of cash available same day. They don't do that with cryptocurrency or Venmo cards," he said. "We're in a cash business today that's big."


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