Although digital retail sales increased during the coronavirus pandemic, as home consumers spend more time on money online, money is still king, according to Brinks’ chief executive.
Doug Pertz, CEO of the money management company known for its armored trucks that transport money, told Jim Cramer of CNBC on Tuesday that the data shows that the circulation of money in the US economy is even greater than pre-levels -pandemic.
“Potential investors confuse that money is falling”, but “the strength of money is as strong as before, and the amount of money [used] in the economy is so strong, “he said in an” Mad Money “interview.
Despite the growing popularity of digital transactions in an increasingly contactless world, physical money remains a mainstay for personal retail purchases. The results have not changed materially since the previous year, explained Pertz.
Citing information from the Federal Reserve, the circulation of money is 16% higher year on year, above the average one-digit compound annual growth rate recorded over the past three decades, he noted.
In addition, 35% of brick and mortar purchases in the United States continue to be made in cash, the company says.
As for Brinks, she said she processed 6% more money through her system than in previous years.
“This clearly suggests that the money is not going away,” said Pertz.
Brinks released fourth quarter and full-year 2020 results before the stock market opened on Tuesday, a session in which its shares were traded more than 6% above, to $ 80.86. The company surpassed analysts’ estimates for the quarter, earning $ 1.02 billion in revenue and $ 1.64 in earnings per share. Revenue was 9% higher than in the previous year’s quarter. It was Brinks’ best quarter of growth since 2018.
Annual revenue of $ 3.69 billion, slightly higher than the company achieved in 2019, was hampered by a decline in sales in the first half.
Brinks, however, sees a future in the digital money 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 convert physical cash to digital in-store format, similar to the way credit and debit card digital money providers do for payments, he noted.
“We think we can provide this digital cash management solution and that is what we are going to do next,” he said. “This is where we are going in an integrated way. We think this solution can be really significant and there is a huge untapped and unventilated market in this space for cash management.”