In Pakistan, ATMs are exclusively owned by banks. This year that has led to trouble, as bureaucratic inertia left the banks unprepared for heavy withdrawals ahead of the Islamic holiday of Eid.
Most automated teller machines (ATMs) remained out of cash on Friday, as more and more bank customers withdrew money for Eid shopping…. Many branches had “out of order” written on their ATM booths. Customers were seen running from one ATM to another to get cash, but to no avail.
This apparently happens every year at Eid. You can imagine what a drag on the economy it is when people who want to spend money are prevented from doing so because they can’t get access to their cash.
Like the false scarcity of ATMs in India, this story is a strong argument in favor of non-bank ATMs. The reason the bank ATMs ran out of money is because people are trying to withdraw money to go shopping. If the stores were allowed to own ATMs that they kept stocked with cash themselves, do you think the shopkeepers would let the machines run out of cash? Of course not. Result: People would have easy access to their money, and shopkeepers would both collect the surcharge and facilitate sales. It’s a classic example of how small-scale capitalism can be more efficient and responsive than large centrally-run organizations.
India appears poised to move towards more use of privately-owned ATMs. Perhaps Pakistan will as well.
