Don’t show me the money: Going cashless in the name of cost and efficiency

While the majority of us rely on anywhere, anytime internet banking some schools still find themselves stuck in the dark ages using cheque books, coins and notes. We speak to the experts about what cashless systems can offer and the kind of savings – both in terms of cost and efficiency – they can afford. Tim Martin delves deep into a future without cash

Time running out for old money

Qamile Zejnullahi, director of marketing, Biostore, highlights the various options SBMs should be considering when thinking of going cashless. “Instead of cash schools can choose PIN codes, smartcards, biometrics or a combination of them all. Smartcards are popular, and work well, but suffer from the inconvenience of being lost, forgotten or damaged. Finger biometrics are, however, the most popular; they are fast, simple and low cost – no cards to provide or replace – and solve all the problems associated with card-driven systems.”

Qamile also suggests that, for ease of use, a cashless system will, ideally, work in conjunction with other school access points. “Using a central identity management system allows the same card or biometric to control many other services. One particularly good example is using the same authentication as a means of taking the register but there are others – such as managing access control through doors, the use of computers and printers and integration into the school library service.”

It is also crucial to consider the impact that implementing a cashless system may have on a school’s safe

Phil Neal, MD, Capita, echoes the idea of making sure there isn’t a conflict between old and new systems. “One of the most important aspects of preparation is ensuring that a school’s chosen cashless system automatically reconciles with the school’s finance system otherwise they will be creating a whole new reporting job for office staff.”

Terry Brown, head of sales at Tucasi, also recommends that any financial changes being made should work alongside existing security practices. “It is important to consider what your parents will be paying for and to make sure that your chosen cashless system will adequately cover those areas.  It is also crucial to consider the impact that implementing a cashless system may have on a school’s safe – which will usually have a limit for insurance purposes – or courier services which collect banking daily/weekly.”

Similarly, David Burgess, Director, Schoolscomm, highlights five areas for SBMs to address before committing to any spending. “Technology – for example, more parents pay online through smartphone apps as compared to standard websites; integration with existing systems; security – ensuring new system(s) comply with payment card industry data security standards; simple to implement and providing ease of use.”

    Contactless payment – essential statistics from Which?

  • 33m: Number of contactless cards issued in the UK since 2007
  • £6.55: Value of the average contactless transaction
  • 6.8m: Number of contactless transactions in a month.

Savings for a rainy day

From a cost perspective Phil points out that prices will generally be dependent upon school size. “Payment systems are most often introduced on an annual fee basis plus a small transaction for each purchase; a one-off set-up fee may also apply. An average secondary school would be looking at under £1,000 and a primary school probably a few hundred pounds.” He’s also got some savvy tips on how SBMs can make the most of their budget and create savings.

“A good rule of thumb when weighing up what you wish to invest in is to balance the outlay against what the gains will mean for your school. Do staff currently spend much time counting cash, reconciling payments and transferring them to the bank? It all adds up surprisingly quickly – in fact one school we have a partnership with reported a weekly saving of two to three hours when they converted!”

Initial set-up costs, licence and training should total no more than £100, while other costs will tend to vary – such as transaction charges

Qamille says that prices are, “…dependent on the number of tills required and the choice of top-up methods used as well as the identification system introduced. A basic solution with online payment and biometric identification will start at under £6000 including installation and training,” whilst on savings she adds that, “The investment is quickly recovered by increased uptake of school meals, lower costs of money-handling and reduced administration time.” She also believes the benefits from savings will be most obvious in the dining hall.

“Cashless systems make the canteen a more attractive proposition to students because of the way they can drastically cut queues which helps to boost uptake and speed-up the process. Meanwhile, for the catering staff and managers, giving students the ability to pre-order on a cashless system helps them plan in a more economically efficient way – not to mention that a cashless system which uses biometrics also eradicates the need to replace lost smartcards.”

…encouraging parents to pay by the lowest cost method and having all parents pay online

Terry says, “First year costs will start from approximately £900 and this includes the initial set up, training and support; ongoing costs will be approximately £350.00.” Savings, he comments, are largely staff-based. “Less time will be spent counting the cash coming into the school office, logging these payments and producing receipts. It is not uncommon for schools to report savings of 10 hours plus per week when moving to an online payment system.  The school may also have costs associated with courier services which collect their banking and so this could provide a further saving.”

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David suggests that, “Initial set-up costs, licence and training should total no more than £100, while other costs will tend to vary – such as transaction charges. The lowest cost transactions are Instant Bank Transfer which are fixed at just 16p.” He identifies several areas where schools can focus on savings, including, “…encouraging parents to pay by the lowest cost method and having all parents pay online.”

Surprise, surprise for schools

The general consensus from our expert commentators is that cashless systems can be introduced for all aspects of school business. Going cashless can provide parents with peace of mind, as Qamile points out. “It ensures that the money parents give their children is spent on healthy school meals rather than on sweets at the corner shop on the way home,” while Phil believes that hidden surprises may reveal themselves. “You might discover unexpected advantages, too, particularly if your school is used to situations where parents think they have paid but the school office can find no record of it.” The financial possibilities seem endless.

    Cashless costs:

  • Under £6000 – cost of Biostore basic cashless solution with online payment and biometric identification (includes installation and training)
  • Under £1000 – cost with Capita SIMS for a cashless payment system
  • £900 – typical first year cost of a cashless system with Tucasi (set-up training and support).

It’s good to talk about going cashless

For those who remain unconvinced, or who might be interested in gaining a further understanding of how cashless systems can improve efficiency, what do our experts suggest?

Phil says, “Get the inside track by talking to as wide a range of schools as possible that have already installed this type of system. Your peers are highly likely to be completely honest with you about what they’ve learnt, which features are critical, where the value is and anything they would do differently. In terms of training most systems are fairly straightforward and require very little guidance.” Terry tends to agree. “Many schools have already trodden this path and will be happy to offer feedback on their findings so it’s worth speaking with schools in your local area. There are numerous cashless systems around and most companies will offer a free, no obligation demonstration; it’s well worth having a look and discovering which system is most suitable for your school’s individual requirements.”

According to David the best ideas are to, “Attend seminars/webinars to see the system in action, choose a system which lets you use it on trial (for free) for a month, speak to the National Association of School Business Management (NASBM) and speak to other schools.” Finally, Qamile suggests that research will prove helpful. “There are number of case studies and blogs by cashless system providers that can easily be found online. They can be a really great starting point to help those who want to find out more about the benefits of a cashless system.”

Silver linings

The new reality of financial technology appears to be one of increased convenience and that allows users to save hours when completing previously labour-intensive tasks. In this sense the advantages of cashless systems, by any objective measure, are distinctive. While they can’t quite be described as a financial ‘silver bullet’ they do get rid of the small change and silver clogging up SBMs’ pockets.

This article first appeared in an issue of Education Executive, penned by Tim Martin.

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