The solution to address the above pain points is multi-faceted, yet one that can be implemented by aligning the necessary components. The solution brings two new variables to the equation – a Cash in Transit (CIT) provider, and a smart safe.

Deployment of a smart safe into an operation such as Bob’s Convenience Store, supported by a CIT, provides a level of visibility, transparency, security, and accountability from which all parties – Bob, the MSB, and the bank – will greatly benefit. Let’s take a closer look:

Smart safe offering

For Bob, a smart safe offers the following benefits:

1. A place to securely store his cash

2. Can be set up in such a way that neither he, nor his employees, can access the cash in the safe

3. Bill validators to detect counterfeit notes

4. Expansive, and near-time, reporting capability – so that authorized entities, such as Bob, his CIT partner, or his MSB partner, can access, locally or remotely, all transactions that have occurred at the safe level – including current content, end of day reports, etc.

5. Daily deposit credit – more on this below

A smart safe also offers Bob another critical benefit. By making the appropriate arrangement with Bob’s bank, the cash-in-transit provider can deploy the smart safe and guarantee the funds in the safe. This is known as provisional credit, whereby the funds in the safe act as if they were in Bob’s bank account.

For Bob, he no longer needs worry about making his deposits within 24-hours to keep him from bumping up against his credit limit. Bob also feels safer, since he no longer transports the money to his bank each day. In fact, he never transports the money as his cash-in-transit provider is doing this on his behalf, as part of its bundled offering.

So now that we’ve established two new variables in the equation – a smart safe and a CIT – let’s review how the inclusion of these two variables addresses the pain points of the three original members – Bob, the MSB, and Bob’s bank.

Bob

Due to the transparency and accountability that a smart safe provides, banks become more confident in the MSB business model. In turn, Bob should have more flexibility to select a bank of his choosing – he no longer has to scramble to find a bank that will accept his deposits.

Bob feels safer, as he’s no longer transporting money to the bank, himself. That’s now handled by his CIT provider.

Bob is more productive, because the time he previously allocated to transporting his deposits to the bank can now be re-allocated to his business.

Bob can run his wire transfer business more confidently, as he no longer fears bumping into his credit limit. Provisional credit enables Bob to have his deposits recognized, even though the funds may still be in his safe.

Bob now has a proven system to automatically detect counterfeit notes. This is significant, as Bob is inevitably responsible for any returned notes from his bank.

Bob can build a more trustworthy relationship with his MSB, as the smart safe provides a level of cash transparency he’s never been able to offer before.

The MSB

Due to the transparency and accountability that a smart safe provides, the MSB has increased flexibility in the banking relationships it desires to establish, as banks are more confident in the MSB model.

The MSB is pleased to have significantly more transparency to Bob’s money transfer business. With assistance from the CIT, the MSB can view a myriad of reports, on a real-time basis, that the smart safe generates. Reports also allow the MSB to adjust Bob’s credit limit, based on real-time data.

The MSB is more confident knowing that Bob won’t run into his credit limits as he did in the past, since the CIT is guaranteeing his deposits via provisional credit. Because Bob won’t bump into his credit limits, the MSB can now be more confident knowing they won’t face a loss of revenue, which would occur if Bob’s account is temporarily suspended.

The MSB is more confident it won’t have to undergo credit underwriting, as Bob’s account should remain in good standing as account suspensions should be drastically reduced.

Since the smart safe accurately records all deposits, the MSB is more confident it won’t run into deposit discrepancies with Bob’s bank.

The CIT who deploys the smart safe will ask the agent (in this case, Bob) to assume ownership of, and liability for, the safe. This removes the MSB from owning, and being responsible for, the asset.

The bank

With the smart safe/CIT model, banks are taking on significantly less risk than they did with the prior model. Let’s review:

The combination of smart safes and cash-in-transit providers enable a more efficient means to handle bank deposits. In fact, many CIT’s offer the usage of their own vaults to store the deposited cash, relieving the bank of this burden.

Given its increased confidence in the MSB model, the bank is more willing to work with a corporate MSB entity to ensure regulatory compliance. It no longer has to assume the risk of working with hundreds of small entities.

Reduces CTR, BSA and SAR inquiries, since the CIT/smart safe model enables such inquiries to fall to the MSB corporate office to follow through with their requirements, and the bank can now monitor one client and not hundreds.

In this model, Bob’s bank no longer has a relationship with Bob (or any other agent). Therefore it does not need to underwrite each agent.

Banks can now view the MSB agent business as something worth supporting, versus a clientele wrought with risks and potential liability.

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