Recently, ATM Marketplace and the ATM Industry Association (ATMIA) published the 2009 ATM Future Trends Report, an update of a similar report issued back in 2004. It examines two linked trends: how the use of cash is changing worldwide, and what that means for ATMs.
One big hurdle: buying the report will set you back $800.
But ATMIA hosted a webinar to introduce the report, and it contains a lot of useful information. Here are the highlights.
Mike Lee, the president of ATMIA, began with a discussion on the future of cash. There’s been a lot of talk about the demise of cash, thanks to the rise of cashless transactions. Why carry around a lot of cash when you can just carry around a debit card?
But reality has confounded the predictions. “Cash will be with us for at least another generation,” Lee said, and he backed it up with statistics and logic.
- Cash is used for about 65% of global payment transactions, a total of 360 billion cash transactions each year.
- According to the Federal Reserve Bank of Boston, cash dominates consumer retail payments: The total value of cash payments is nearly four times higher than the value of card-based payments.
Why is cash so popular? Several reasons:
- Informal. There’s no need for record-keeping, security checks or processing. It’s immediate, easy to use, fee-free and anonymous.
- Vending machines. They’re a $20 billion industry in the United States, and 90 percent of the 6 million installed machines are cash-operated. They’re used most heavily in urban environments.
- Familiar. It’s tangible, universal and popular, so there is a lot of consumer resistance to getting rid of it.
Then Tracy Kitten, editor of ATM Marketplace, presented the results of their 2009 survey on ATM trends and usage. They identified two big trends:
- Increased use of advertising on ATM screens
- Huge growth in “underbanked” people — those who never had much need for banking services but now do. ATMs are the most efficient way to deal with that growth.
That second one is a biggie, and driven by the growing urbanization of our planet. City dwellers use both cash and ATMs more frequently than rural residents. The Center for Financial Services Innovation estimates there are 106 million underbanked people in the United States, and that number will only grow as urbanization increases.
The recession favors cash and ATMs, too. In an op-ed piece in the Boston Herald, payments expert Sam Ditzion had this to say:
Tighter credit means fewer people with access to credit cards. And recession means more maxed-out cards that aren’t available for use.
“More and more people simply do not trust themselves with any type of plastic, credit or debit cards, and are removing them from their wallets altogether. Some families are starting to budget by withdrawing a finite amount of cash from the ATM each week to pay for all of that week’s expenses. Other families are reverting to the Depression-era monthly envelope system, placing cash in envelopes labeled rent, groceries, clothing, and so on. When it’s gone it’s gone.”
All told, it looks like both cash and ATMs have a strong role to play in the banking system for the foreseeable future. And when you consider the ever-improving features on ATMs — advertising, issuing coupons, selling stamps, etc. — it’s obvious that they will be able to thrive even if the use of cash eventually declines.
If you want to learn even more, visit the links above or the ATMIA’s Future of Cash page.
[...] works especially well in the current economy, where people have begun using cash as a budgeting method. They don’t want to get lulled into carrying credit-card debt, so they use cash whenever [...]