Smart safes, offering merchants deposit credit for cash that has not even left the store, are helping banks crack new markets.

These safes, which are linked to banks' networks and keep track of how much money has been deposited, have become an important element of some financial companies' retail payments services, attracting new customers and increasing revenue from existing clients.

Payments executives compare the safes to remote deposit capture, saying both technologies let banks serve customers outside the institution's footprint. In some cases they are bundling the two to handle clients' checks and cash.

Fifth Third Bancorp began testing the technology in 2007 and now has nearly 100 customers using its Remote Currency Manager safes at 3,000 sites, said Jeff Ficke, a senior vice president and treasury management director at the Cincinnati banking company.

The company pitches clients on a "triple play" of payments services, including card processing, remote check capture and the smart safes.

Ficke said the safes have made the service stand out from using cash couriers. "Provisional deposits are key," he said. "When we added our piece in, that really changed the value proposition."

Target markets include consumer businesses that handle lots of cash: quick-service restaurants, convenience stores, specialty retailers including automotive after-market and apparel, insurance agencies and government offices like motor vehicle departments.

The merchant can save on courier services because it needs cash pickup only once or twice a week rather than daily, and the safe reduces the risk of robbery or other cash loss.

The combination of three factors — provisional credit for deposits in the smart safe, improved risk management and more efficient operations — makes the business case, Ficke said.

Two Fifth Third clients are Buffets Inc., an Eagan, Minn., restaurant operator, and the Atlanta restaurant chain Wendy's/Arby's Group Inc.

Randy Colvin, a vice president at Fifth Third and the manager of its Remote Currency Manager product, said Buffets now processes 100% of its deposits through Fifth Third's various payments services. "A lot of their franchisees are out of our footprint, and we handle all their receivables," he said, and about 75% of all Remote Currency Manager deposits come from out of Fifth Thirds footprint.

Ficke said the smart safes fit into Fifth Third's overall retail payments strategy. "We are one of the few financial organizations that take a holistic approach to their receivables management," he said. Handling cash, checks and cards "is going to take us to the next level of growth."

Fifth Third is not alone, however; other banking companies are also offering smart safes to merchants.

JPMorgan Chase & Co. has gone live with a couple of clients in the last few months, said Joseph P. Stark, the executive director of coin and currency serivces in the New York company's treasury services unit. Both are fast-food chains, but he would not name them.

"It has just started to get traction with the banks this year," Stark said, and the banking company has many other merchant clients that might be interested in smart safes. "We have thousands and thousands of other clients for whom we are providing other services but not necessarily cash services."

Its treasury services unit works with all three major national armored courier companies and sells the service in a consultative approach to corporate clients, Stark said. "We have been watching the market for several years. We have reached a tipping point of client interest."

Financial companies began testing the smart-safe concept about two years ago. The safes typically contain a bill acceptor that can recognize the notes' denominations, and they are linked electronically to a bank's systems. Merchants receive deposit credit when the money is inserted into the safe, though a courier may not deliver the currency to a branch until several days later.

Sterling Financial Corp., an $11.9 billion-asset banking company in Spokane, Wash., has 150 to 200 smart-safe customers, mostly retailers and grocery stores, with some casinos, said Michele S. Bisconer, the manager of the automated clearing house and cash vault departments at Sterling Savings Bank.

Sterling works with the courier Garda World Security Corp. to manage customers' currency and with Garda's partner, Bluepoint Solutions Inc., to capture checks, she said.

"In our Northern California area, we could not be competitive in that marketplace until we opened that vault with Garda," Bisconer said. "In Northern California, we couldn't even offer next-day deposits before partnering with Garda."

Sterling, which introduced the service in January, is now able to offer same-day deposits for cash vault customers, she said.

"It has really allowed us to compete in any geographic location that we choose to now," Bisconer said, "and offer an effective, cost-competitive product to our customers. I believe the product gives us an edge over competitors."

Michael McSpadden, a senior vice president in Garda's cash logistics group, said the company's smart safe, which Garda calls CashLink, can be connected to both a bank's system and to a retailer's point of sale system for improved financial management.

He would not say how many customers are using CashLink but estimated that smart safes are in use at 20,000 sites industrywide. The market could potentially reach 2 million to 3 million sites, he said.

"It's not at the early adopter stage. It's at the start of the growth stage on the bell curve," McSpadden said. "With the down economy, everybody is trying to save money."

A merchant can buy the device or lease it through Garda or through the bank, he said. "For some banks, it could be an additional revenue source," he added.

Fifth Third has created a dedicated sales team to promote Remote Currency Manager, Ficke said. The team works with corporate clients to study merchants' business practices and identify ways that the smart safe can help them. "We look at the ways they interact with their couriers," he said. "We look at the ways they interact with their banks."

When pursuing a contract, Fifth Third targets three departments in a prospective client's organization: operations, where the issue is the time involved to manage day-to-day cash-handling issues; risk management, where the concerns are robbery, employee theft and lost deposits, and treasury, where the issue is quicker availability of funds for other corporate purposes.

Different executives latch onto the idea at different companies, Ficke said. "Somebody is going to take the lead. They're going to be an innovator."