Often described as a monopoly industry, cash-in-transit is a sector with a vibrant and disruptive alternative supplier.
Authentic Security holds a market share in CIT that its CEO, Andrew Nathan, estimates at seven per cent.
Linfox Armaguard holds a market share in the order of 90 per cent and has done since the ACCC gave the green light to Armaguard’s takeover of Prosegur in mid 2023.
Since then, Authentic has stepped up with a heavy investment program.
Authentic has built a new secure cash distribution hub at its headquarters in suburban Sydney to bolster its national coverage, with depots and services in Sydney, Melbourne, Brisbane, Perth, and Adelaide offering a full-service model equivalent to Armaguard.
The company has also expanded its footprint through joint ventures and contractors in strategic regions of Australia.
“The message I want to get across to the industry is that there is an alternative, we supported the merger understanding the pricing war that was engaged in by Prosegur and Armaguard. We also felt the brunt of the commercial outcomes and significant price reductions in cash services” Steve Newton, one of the founders of Authentic told Banking Day.
For more than a year, the banking and retail sectors have been alarmed over the short-term and long-term viability of Linfox Armaguard, leading to a $50 million a year support package agreed several months ago. The four major banks, major retailers and Australia Post are all paying extra to support Armaguard, with the major banks believed to be footing the lion’s share of this bill.
Oddly, despite the critical role Authentic plays as a viable alternative in the cash in transit industry, Authentic Security have largely been frozen out of industry roundtables over the last year mediated by the Australian Banking Association and the Reserve Bank of Australia over the future of cash distribution and backup measures in the event that Armaguard were to run into financial difficulties, and even cease trading.
This raises an important question for the ACCC, RBA, banks and greater industry that supports and uses cash: why isn’t Authentic Security, a credible national player, included in these discussions and offered financial support to ensure a competitive and resilient market?