Cash-in-transit heists on the up

Aspike in cash-in-transit heists is leading to grave losses in human life while driving up the costs associated with cash.

South African Banking Risk Information Centre (Sabric) data shows a 43% increase in cash-intransit heists from January to November, with cash losses also up 14% over the periods compared with the same period in 2016. Sabric wouldn’t disclose the exact number of incidents nor the financial losses experienced.

In mid-October, a tweet by First National Bank (FNB) SA CEO Jacques Celliers put the figure at just under one incident per day.

Doug Walker, Absa’s managing executive for physical cash, told Moneyweb that the industry is seeing over 30 cash-in-transit incidents per month, which, in line with Sabric data, was up 44% year-to-date compared with October 2016.

“These crimes have financial consequences for the banks, with October 2017 year-to-date industry losses increasing by 26% compared to 2016.”

Sabric CEO Kalyani Pillay said a common modus operandi had been identified across incidents.

“Large groups of criminals, heavily armed, using automatic rifles, driving stolen luxury vehicles force the cash-in-transit armoured vehicle to a stop and use explosives to access the vaults on the vehicle. The result is a total write-off of the vehicle.

“The violence used during these incidents and incidents where security guards are conveying cash between service points and the armoured vehicle, results in loss of life.”

The organisation registered a 74% increase in fatalities, including that of perpetrators, while injuries increased 32% over the 10-month period.

Pillay said Sabric, with the cash-in-transit industry, is working with Saps to address the scourge.

The incidents are driving up the costs associated with cash, some of which are passed on to consumers.

“[The] costs to provide cash services are wider than just handling costs. Costs are generally passed on to the consumers through cash deposit fees or cash withdrawal fees – this takes into account the insurance, security, handling, funding in relation to holding of cash reserves, premise, industry, risk and transport costs.

“Many of these costs are incurred at every point that cash is stored or moved in the journey to the customer,” Standard Bank said.

The major retail banks all told Moneyweb that costs associated with insuring cash have increased multiple times over and above inflation as the incidence of crime has increased, with some noting they’ve absorbed as much of the costs as possible.

Citing data from PYMNTS June 2017 Global Cash Index, Walker said 50% of SA consumers prefer to pay in cash and that the SA Reserve Bank predicts a 6% compound annual growth in cash and coin circulation through to 2020.

Also, a shift from physical cash towards electronic means of payment is being observed.

According to FNB Value Banking Solutions CEO Ryan Prozesky, the bank is seeing card-based payments exceed ATM withdrawals in the ratio of 60:40 by value, with card-based purchases continuing to grow in excess of 15% per annum by value, while ATM transaction values are growing less than 5% per annum.