Efforts to cease the production of pennies in the U.S. have been slow to catch on, meaning banks still have plenty of opportunities to benefit from installing coin counting machines throughout branch lobbies. Even though Americans may complain about receiving small denominations of change when making cash transactions, the long-term accumulation of coins makes it possible for individuals to use automated machines at local financial institutions to easily turn that money into paper currency.
US slower than other nations to adjust coin circulation
The online publication Point of Sale News cited data from RetirethePenny.org that found the last time the U.S. Mint eradicated the use of a coin was in 1857, when it halted circulation of the half cent. While many countries around the world have taken steps to get rid of their lowest coin denominations, the U.S. continues to produce pennies at full scale. This is despite the fact that the cost of producing coins has far exceeded the monetary value. According to The Washington Post, manufacturing pennies requires 1.8 cents per coin, which is nearly double the intended market value. Nickels cost 9.4 cents to produce.
The article revealed that this disparity caused the U.S. Mint to lose $105 million in 2013 just from the production of pennies and nickels. These costs are eventually transferred to taxpayers. A report from Reuters indicated that President Barack Obama has suggested eliminating this production problem by using cheaper metals in the manufacturing process. Aside from the need to save money, the federal government has also identified the growing popularity of electronic payments as a reason to conduct a closer review of domestic coin production.
Coins are no trouble for banks
In the mean time, American consumers will continue to acquire large quantities of change on a regular basis. Banks have a chance to leverage this trend to increase in-branch traffic by offering self-service coin counters as an extra on-site amenity. Turning coins into cash is an attractive option for savings-conscious individuals. Having direct access to these machines will likely reinforce the importance of brick-and-mortar financial establishments in the eyes of consumers. People who visit a bank to complete these tasks will have direct exposure to the long list of other valuable services offered at the business, meaning branches have the chance to attract more customers in the long run.
March 17, 2014