Less Cash, Fewer ATMs

Cash has been on a steady decline with the growing adoption of digital payment. However, the COVID-19 pandemic accelerated this trend. In the UK, for example, UK Finance found that 23.1 million consumers used cash only about once a month in 2021, up sharply from 13.7 million in 2020. The banking body believes this trend will continue, predicting that cash will be used for only six percent of payments in the UK by 2031.

As cash payments decrease, so do the number of ATMs. The number of machines worldwide dropped two percent in 2021, according to the Global ATM Markets and Forecasts report. Declines in ATMs were especially large in China, Russia, and Brazil. Some countries did see small increases in 2021, including the U.S. and India. The report forecasts a further global decline of five percent between now and 2027. It predicts just two regions will see growth in ATMs after 2022: Latin America and the Middle East and Africa.

That doesn’t mean ATMs are going away, though. They’ve come a long way since they were invented by John Shepherd-Barron in 1967 because he wanted to be able to obtain cash outside of normal banking hours. Convenient cash access is still the primary purpose of the ATM. Today it can do much more, though, even offering much of the functionality of a fullfledged branch if desired.

And customers still like them. A 2021 PYMNTS study found that 41 percent of respondents used ATMs for some portion of their banking business. In fact, digital trends may be ushering in a new role for them.

With the new possibilities for ATMs, the way banks support them will need to change, said Steve Hensley, KAL’s Executive Vice President for Global Sales. Even though most ATMs today currently use Microsoft’s Windows operating system, their software still tends to be closely tied to the companies that manufacture the machines. With such a small number of vendors providing software, this has also limited the kinds of hardware that can be used.

“Up until now, the ATM has been treated as an island,” Hensley said. “But with the increasing adoption of cloud technology and the introduction of XFS4 (the latest introduction of a clientserver architecture for ATMs and other devices), banks will have the option of using different software and different hardware modules. Up until now, ATMs have moved at the vendors’ pace. Now they can move at the banks’ pace.”