Cash-in-Transit Service Australia Trends
Category Intelligence on Cash-in-Transit Service Australia covers the following
- Information relating to market, supply, cost, and pricing analysis
- Hard to find data on cost and TCO models, supplier details, and performance benchmarks
- Macroeconomic and regional trends impacting cost, supply, and other market dynamics
- Category-specific negotiation and sourcing advice
Industry Outlook & Drivers
Regional Market Outlook on Cash-in-Transit Service
Supplier Maturity – The market is a duopoly, dominated by Armaguard and Prosegur, who offer a wide range of product portfolio, bundling CIT services with cash management and ATM maintenance services
Buyer Maturity – The maturity of buyers is also high, as they engage with suppliers on KPIs/SLA-based contracts, and focus on technologies to drive cost-savings
Market Dynamics and Trends
Consolidation of suppliers
- A shift in consolidation of suppliers has been witnessed in the last few years in Australia. A major reason being the increase in pressure on cost of staff, fuel and other elements are not reducing for the suppliers, making the profitability low
Growth in cash management services
- Cash management consists of verifying, reconciling, processing, forecasting, storing, and total management of customer cash and coin in a seamless and transparent manner for the customer
- Processing and managing currency has grown tremendously with the service providers dedicating state-of-the art facilities for currency processing and management
Retail cash automation
- Cash dispensers, smart-safes, and recyclers have been at the forefront when it comes to automating the cash handling process
- By providing the capability to accept, authenticate, sort, count, and in some cases dispense cash, these devices automate the back-office cash handling and provide significant labor savings to the merchant or bank using them
Growth in electronic payments
- The proliferation of payment options other than cash, including credit cards, debit cards, stored-value cards, mobile payments and on-line purchase activity, has resulted in a reduced volumes for the cash in transit companies
Growth in “Soft skin” CIT operations
- Historically, the CIT work had been completed by armored trucks but increasingly soft skin operators have commenced completing larger amounts of work in the sector. “Soft skin” CIT operations have a single guard who does not wear a uniform, an unmarked, unarmored vehicle with limited security features
Industry Drivers and Constraints
Drivers
Integrated/Bundled solutions
- The clients are leaning towards integrated solutions which can cover both cash management services and armored car services
Increase in ATMs
- ATM management has been a major driver of armored car services and cash management
- Installations of ATMs is forecasted to grow at a CAGR of 6.3% until 2019 in North America, which will continue to drive demand for armored car services
Increase in crime rate
- Increase in crime rate has driven the outsourcing of cash handling to specialist service providers, thus reducing the risk for customers
Laws and regulations
- Complying with laws and regulations related to Cash-In-Transit (CIT) has driven the outsourcing of these services to specialist service providers
Constraints
Rise in insurance premiums
- Increasing crime and theft rates calls for rise in insurance premiums
- Increase in pension liability
Pricing pressure
- Significant competition and pricing pressures in most markets
Decreased use of cash
- Decreased use of cash in developed markets
- Closure of numerous local bank offices has reduced access to cash
Porter's Five Forces Analysis – Australia
Supplier Power
- The cash-in-transit market in Australia is a duopoly and hence the supplier power is high
- The CIT industry is both a labor intensive and capital intensive industry, where established players like Armaguard and Prosegur dominate the market due to their service capabilities
Barriers to New Entrants
- High supplier consolidation becomes a threat for the prospective vendors in terms of creating a market space for themselves
Intensity of Rivalry
- The rivalry among competitors is pretty low as there are only a handful of suppliers who can provide integrated cash management solutions and they have a reasonable market share for themselves
Threat of Substitutes
- Large buyers can leverage volume of contract as a bargaining power, in an otherwise supplier dominated market
- Large buyers make an attractive client for any supplier in terms of contract volume, thereby gain better negotiating power
