Will ATMs Disappear from the World ?
Banks and other financial institutions uses ATMs to extend their services to customer around the clock. In today’s context the ATM machines are mostly used by customers for balance inquiry, cash withdrawals, fund transfers and bill payments. There are ATMs which does much more than that too. Specialized ATMs are capable of accepting cash, foreign currency exchange, cheque deposits, Apply for Loans, etc… Simply ATMs allow people to access their physical cash easily, securely and conveniently.
Maintaining ATMs are costly…
Maintaining an ATM network is not a simple as you may think. There are so many areas that you need to look after;
- Cost of an ATM machine (if you wish to expand the network)
- Cost of Location (Not all ATMs are with in Bank premises)
- Cost of Security (Single ATM may contain millions of Rupees/Dollars at a given time)
- ATM troubleshooting (ATMs go out-of-service due to many reasons)
- Cash Loading/Unloading (Re-filling an ATM with Cash involves Technical Staff and Security Personals)
- Power consumption, Connectivity/Network maintenance and related costs
- ATM monitoring 24 x 7
- Fraud Monitoring
The ATM business owners (Banks/Financial Institutions) will have to ask themselves whether they can earn more from fees than the the cost of maintaining the ATM Network. In some cases small ATM business owners will either give-up or sell their ATM network. Some small Banks/Financial Institutions will not even try to start an ATM network, instead they use ATM service of a larger existing ATM Network. Even with the existing maintenance costs some banks charge a significant amount of fees from it’s customer on using their ATMs, to maintain the profitability from ATM business. Due to this, customers tends to move to alternative payment options other than using ATMs where applicable fees are low.
“Thirty years after bursting onto the banking scene, ATMs are slowly becoming obsolete” – Anthony Keane, News Corp Australia Network
New Technological Advancements…
World is now moving into virtual cash and online transactions instead of using physical cash. Mobile payments, NFC, Bio-matrix access, retinal scanners, etc…
According to Ericsson’s mobility report, By year 2020, 70% of the world will be using a smartphones and mobile data networks will cover 90% of the population. World leading tech companies are now providing their own mobile payment solutions (Apple Pay, Android Pay, Samsung Pay, etc…) which will make it more easy for people fulfill their financial needs without using an ATM.
Also the people will feel it more easy and time saving when using a mobile app, which is accessible at any time, instead of visiting and ATM.
Due to latest trends (such as IOT Smart Payments, Mobile Banking, Block-chain, Artificial Intelligence & Machine Learning, Open Banking, etc…) the Banks and Financial Institutions too tend to provide financial services through these technologies instead of costly ATMs.
Decrease in using Physical Cash…
Most frequent transaction made at an ATM is Cash Withdrawal. In Sri Lanka, more than 70% of ATM usage if for Cash Withdrawals and one of the leading Bank in Sri Lanka dispenses more than 1 Billion Rupees per day. Having said that, on the other hand, online transactions (online purchase, payments via Cards/Mobile, etc…) are increasing day-by-day. This means people are reducing the usage of Physical Cash and moving towards Virtual Cash.
When people can find all what they can do using an ATM inside their mobile app, soon usage of ATMs will be decreased. At the same time banks will find it very costly to maintain the ATM network, since it will generate lower and lower revenue as fees, banks will start discontinuing their ATMs one-by-one. When people feel it more convenient and secure to use a mobile app and virtual money, instead of using physical money, it will become irreversible.
“When physical cash is no longer available, ATMs will disappear from the world”