ATMs have been a go-to convenience for consumers and business owners for decades. Found all over the world on the main streets of cities, in shopping centers, gas stations, and restaurants, ATMs have been the life-saver for getting quick cash, as well as avoiding standing in line at the bank just to do a quick deposit.
As such a relied-on device, it’s hard to even imagine that recent predictions estimate that the ATM is set for extinction in less than 25 years. The signs are there as more people prefer mobile payments, payment apps, and contactless payments over carrying cash even for the smallest transactions.
Let’s look more closely on the potential signs that this device may go the way of VCRs, CDs, and other technology that we never thought we’d live without.
Global ATM Closures and Declining ATM Sales
ATMs are already starting to disappear. For example, Expert Market cited statistics from the UK’s House of Commons where ATMs are declining at a rate of 3,600 a year, which makes them extinct in that country by 2037.
Fewer ATMs are being purchased around the world, especially in countries like China, where consumers no longer want to use them. Overall, ATM hardware sales are very low and shrinking each year.
Changing Payment Behavior
Consumers around the world are making more card payments, which has led to a steep decline in cash payments. This is because smartphones have become like a mobile bank or ATM with all transactions done from this small portable screen. Even banking apps are allowing customers to take a picture of their checks and deposit them digitally, saving many stops at ATMs.
Fee and Expense Exhaustion
Consumers are avoiding ATMs more because they are tired of paying convenience fees for using machines that may not be in their banking network. Instead of paying ATM fees, they can use mobile payment apps and digital wallets, like Apple Pay, and avoid losing any money to fees no matter where they are in the world.
Even retailers that had the ATMs in their stores were finding there were costs involved that they no longer wanted to pay. Banks also incur high costs to maintain their ATM networks, so the new payment methods are more attractive at a much lower expense.
Fewer Physical Stores
The signs have been clearly seen in the number of retail store closures and bankruptcies around the world, as well as lower shopping center traffic. Consumers are buying more online or choosing on-demand options that let them buy from their laptops and mobile devices and then pick up at a store or have the items delivered.
Criminals Moving Online
In terms of crime patterns, online fraud, contactless fraud, and mobile fraud are growing, indicating a shift away from the traditional devices that once fueled criminal activity. Thanks to technologies like artificial intelligence, more criminals are being shut down on all fronts.
Possible ATM Life Extensions
Besides testing out Bitcoin acceptance, another potential way to extend the life of ATMs has been the appearance of contactless ATMs. Like the POS devices in stores, users can tap and go without inputting a PIN, potentially saving concerns over identity theft.
According to the U.S. Payments Forum, which released a white paper for ATM owners and operators on how to accept contactless chip transactions at their machines, it’s important to add this option to encourage consumers to still use this device. Consumers can still enjoy the same speed and security as using a contactless payment method elsewhere while being able to quickly get cash or make a deposit.
As the payments organization noted, “Consumers are getting used to making fast contactless payments at merchant locations across the U.S.; the ATM is the next logical segment to go contactless. It’s important that ATM providers, acquirers, processors, and vendors understand the requirements and full process when it comes to implementation.”
Near Future Decisions
As a business owner that may offer an ATM or an entrepreneur that owns an ATM business, the changing state of payment preferences has led to a crossroads decision. Although contactless ATMs may provide some life for ATMs, the signs point to extinction as more consumers and businesses move to a mobile, cashless payment environment because they want to control when and where they can make payments. It may well be that future generations will hear stories about ATMs just like they did about the telephone, record player, and other antiques.