While digital retail sales have risen during the coronavirus pandemic as home consumers spend more time on money online, cash is still king, according to Brinks chief executive.
Doug Pertz, CEO of the cash management company, knows about armored trucks carrying money, told CNBC’s Jim Cramer on Tuesday that the data shows that the circulation of cash in the US economy is even higher than pre-pandemic levels.
“Potential investors confuse the fact that cash is falling,” [used] in the economy is just as strong, “he said in an interview with” Crazy Money. “
Despite the growing popularity of digital transactions in an increasingly contactless world, physical money remains a staple for in-person retail purchases. The results have not changed materially since a year ago, Pertz explained.
Citing information from the Federal Reserve, the circulation of cash is 16% higher from year to year, compared to the average growth rate composed of a single figure recorded in the last three decades, he mentioned.
Moreover, 35% of US brick purchases continue to be made in cash, the company says.
As for Brinks, he said he processed 6% more money through his system than in previous years.
“This clearly suggests that the money will not go away,” Pertz said.
Brinks released fourth-quarter and 2020 results ahead of the opening of the stock market on Tuesday, a session in which its shares were traded more than 6% higher, up to $ 80.86. The company exceeded analysts’ estimates for that quarter, generating revenues of $ 1.02 billion and earnings per share of $ 1.64. Revenues rose 9% more than last quarter. It was Brinks’ best quarter of growth in 2018.
Year-on-year revenue of $ 3.69 billion, barely higher than the company’s revenue in 2019, was affected by a decline in first-half sales.
However, Brinks sees a future in the digital cash management space. About a third of brick-and-mortar retail transactions continue to be made in cash, and Brinks is looking to provide an integrated solution, Pertz said.
The solution can help retailers turn physical cash into digital form in the store, similar to how digital debit and credit card providers do for payments, he noted.
“We believe we can offer that digital cash management solution, and we will continue to do that,” he said. “In this sense, we are going to an integrated base. We believe that the solution can be truly significant and there is a huge untapped and unvented market in this space for cash management. ”