Industry News

A recent report by SkyQuest Technology Consulting finds that the demand for ATMs is increasing, even in the face of increased online payment methods. According to SkyQuest, there are currently approximately 3.1 million ATMs around the world, and JPMorgan Chase expects that 2021 global ATM transactions will have amounted to $12.6 trillion. Better Functionality With ATMs increasing their service capacity with added features, ATMs are becoming more and more of a necessity, especially in rural communities where brick and mortar banks may be scarce. According to SkyQuest’s press release, “SkyQuest has been closely monitoring the ATM industry and its potential effects on the global economy. The banking sector is the biggest user of ATM technology, accounting for approximately 65% of total ATM transactions worldwide. The global ATM market is divided into two types: in-network (inside banks) and out-of-network (outside banks). In-network machines generated 57% more revenue than out-of-network machines; however, out-of-network machines generated a higher net margin due to higher Merchant Service Fees (MSF).” Banks Investing in ATMs The study found that banks are increasingly spending money on ATM technology and infrastructure. SkyQuest also encourages ATM policymakers to “ensure effective technology transfer and financial regulatory reforms” in order to help manage new technologies and investment. In spite of a trend toward cashless payments, the need for cash around the world is still in high demand. And with better technology and increased services, the future of ATMs appears to be bright.

Cashless and contactless payment systems rose steadily during the COVID-19 pandemic, even as the amount of cash on hand increased during that time. With consumers diversifying the way they handle payments, ATM companies are dreaming up ways to adapt and cater to customer’s differing needs.  Universal ATMs One way that ATM manufacturers are adapting to new ways of thinking is in creating Universal ATMs. These ATMs can have several different components to them, depending on what retailers are looking for.  Here are a few ways that manufacturers are including or exploring for their ATMs: Reverse ATMs – Where a customer can insert cash and receive a pre-paid debit card for use at events.  Self Checkout – Many restaurants are now removing the process of having waitstaff handle financial transactions. Self checkout ATMs allow customers to pay for their meal using cash or incorporating cash into restaurant loyalty programs. Gaming – Video game terminals are typically cashless. However, new technology allows game terminals to deliver QR codes that can be taken to an ATM to redeem cash rewards. There is still a great need for access to cash, especially in areas where brick and mortar banks are few and far between. ATMs that further adapt to include services for people who prefer cashless transactions will continue to thrive and generate increased patronage.

There’s been a lot of talk about cryptocurrencies over the years. The most popular cryptocurrency, Bitcoin, was introduced in 2008 as a currency that had no need for a central bank. Bitcoins are sent to and from users using the bitcoin peer-to-peer network. Bitcoin, like most cryptocurrencies, started with basically no value. According to Statista, a leading statistical data source, the value of Bitcoin has varied widely over the past decade. However, the value of Bitcoin rose alarmingly quickly to a high level in 2020 and it has never really dropped that dramatically since. With bitcoin becoming more mainstream, more interest in investing in bitcoin has come about. However, potential users aren’t always as tech savvy as they may need or want to be to develop a cryptocurrency portfolio. That’s where Bitcoin ATMs come in. What is a Bitcoin ATM? A Bitcoin ATM, like a traditional ATM, is a kiosk that allows customers to engage in financial transactions. In the case of a Bitcoin ATM, the kiosk allows users to safely purchase or sell Bitcoin using cash. Over the past decade, Bitcoin ATMs have become more popular on a global scale. In the United States, according to the project How Many Bitcoin ATMs – a group of academic researchers and volunteers from MIT, Stanford, and other universities –  there are currently over 50,000 Bitcoin ATMs in the United States. This is a sharp increase from late 2020 when there were fewer than 20,000 Bitcoin ATMs in the U.S. Will Bitcoin ATMs Last? This seems to be the million dollar question. However, the ATM industry seems to think so. Given that the value of Bitcoin is somewhat steadily increasing and the rise of Bitcoin ATMs being installed, it appears that investing in a Bitcoin ATM might be an added service that IADs want to explore. And since Bitcoin ATMs can partner with traditional ATMs, the question of whether or not to install a Bitcoin ATM might just be a no-brainer.

For some time when one wanted to buy Bitcoin it felt like a back alley transaction. It seemed like you had to know a guy who knew a guy. Now, however, access to Bitcoin is ever-increasingly in the mainstream. Bitcoin ATMs around the world have helped enhance the cryptocurrency’s adaptation into mainstream economies. There are currently over 50,000 Bitcoin ATMs in the United States. These numbers are steadily rising with the increase of cryptocurrency users around the world. According to Statista, a leader in market research and statistical data, there are estimated to be approximately 221 million cryptocurrency users around the world. The number of users increased a whopping 190% between 2018 and 2020. Bitcoin ATMs are a Good Investment The rise of cryptocurrency users has brought about market stability for Bitcoin. While Bitcoin at its inception was very rarely used, with even your average Joe using Bitcoin these days, it marks a willingness to incorporate Bitcoin into the American economy. Bitcoin ATMs, which once might have been considered a risky investment are now seen as a sound business choice – potentially increasing foot traffic into a business and thereby increasing sales. Bitcoin Serves Everyone Not everyone has the financial means to buy stock in Apple or Google. However, many Bitcoin users purchase the cryptocurrency using cash, meaning it opens the market to many underserved communities. Placing a Bitcoin in a location that is widely used by people from all walks of life gives access to investing in Bitcoin to just about anyone. Many investors have watched the value of their Bitcoin rise exponentially. At the end of 2020 the value of Bitcoin was roughly $20K. As of this writing, the value of Bitcoin is over $36,000. While Bitcoin can fluctuate quite a bit in its value, it has risen aggressively from its inception, when it was valued at just above zero. Business owners seeking to increase foot traffic, customer satisfaction, and their bottom line, may seriously consider adding a Bitcoin ATM to their space, especially when paired with a regular ATM, allowing customers to withdraw cash and use it to purchase Bitcoin. As cryptocurrencies continue to gain in popularity, giving easy access to customers seeking to invest in them is a simple way to get in on a rapidly growing market.

MarketsandMarkets, a global business-to-business marketing research firm, recently published a lengthy global forecast report for Blockchain devices, including Hardware Wallets, Blockchain Smartphones, Crypto ATMs, PoS Devices, and Blockchain IoT Gateways. The report finds that the blockchain device market is projected to grow to $2,459 million by 2026. That is up from the current rate of $482 million in 2021. A blockchain devices, according to PR Newswire, are “designed for handling the blockchain technology transactions and work in the same way as blockchain technology, i.e. decentralized system or decentralized ledger. The primary application of the blockchain technology is cryptocurrency.” These devices may come in the form of point of sales terminals, blockchain smartphones, crypto automated teller machines (ATMs), and crypto hardware wallets. Market Drivers According to the report, what is driving the uptick in the market is the “adoption of blockchain technology increased rapidly after the introduction of Bitcoin and is being used by various financial institutions. This technology is being increasingly used in various business applications, such as payments, exchanges, smart contracts, documentation, and digital identity. Blockchain technology offers secure and tamper-proof ledgers, thereby infusing greater accuracy and secure information sharing into the financial services ecosystem.”.  The report expects that North America will hold the majority of the blockchain devices market throughout the forecast period. The United States is home to the largest blockchain service providers, including Microsoft, IBM, and Oracle.

The ATM Industry Association (ATMIA) recently published a new position paper regarding Universal Cash Deposits for ATMs. The ability to deposit cash is a vital part of the ability to access cash, both for the customers who use cash and for businesses who accept it as a form of payment.  With the number of bank branches dwindling around the country, there is an increasing risk of “cash deserts,” where easy access to cash is not available. In these areas of the country, ATMs have a great role to play in preventing much of the country losing access to cash. ATM deposits, known as Universal Cash Deposit, can be defined as “an interoperable system within an ATM network, or across multiple networks, for accepting cash deposits at enabled ATMs on an ‘interbank’ basis, whereby a customer from one bank may deposit cash at ATMs owned and operated by other banks or by IADs.” ATMs Play Their Part To help prevent cash deserts around the country, ATMs that accept deposits “lead to greater cost efficiencies in the circulation and distribution of cash – which remains the main service provided by ATMs more than 50 years after their invention.” Additionally, ATMs have a role to play in generating increased income for ATM owners who place deposit-accepting ATMS in their businesses (such as convenience stores, boutiques, salons, bars and restaurants). The Recommendation According to ATMIA’s position paper, they believe that “deposit-taking ATMs and recirculating ATMs will be a huge part of the future of the ATM industry and of the cash cycle in most economies. The blueprint for Next Gen ATMs specifies the standard interfaces for the cash-in and cash-out functionality, for both notes and coins. “To promote this excellent technology, the association recommends that each ATM network around the world implements standard Universal Cash Deposit Transaction functionality. This will allow any citizen or business with a bank account to deposit cash at any cash recirculating enabled ATM in that network, or across networks, thus reinvigorating the whole cash cycle and spreading access to cash despite the fall in the number of bank branches.” As bank branches continue to disappear around the country, especially in rural communities, access to an increased menu of financial transaction services that ATMs can provide, will be increasingly important to keeping access to cash available nationwide.

The Federal Reserve Bank of Atlanta recently announced the establishment of a special committee to look at payment inclusion.  The committee will be a public/private collaboration that will work to promote inclusive banking practices throughout the country. Payment options like digital wallets, apps, and mobile payments are convenient and have gained usership in recent years. However, these payment systems are often unavailable to people in the United States who are currently unbanked or underbanked.  The committee, made up of payment and financial inclusion experts, will research emerging challenges in payment inclusion, including collecting and analyzing data to understand trends in the payment system. They will then make recommendations to the industry based on their findings. The committee will be active for two years. Inclusion Matters Rafael Bostic, President of the Atlanta Fed and chair of the new committee, stated, “It is important to make sure that there is not just one path to financial inclusion. By focusing on payments inclusion, we hope to ensure that cash-based users and vulnerable populations are not further marginalized from innovative financial services.”  Bostic continued, “By bringing people together from a diverse set of backgrounds and focusing them specifically on the issue of inclusion, we expect conversations unlike others that have touched on this subject.” Committee Members Other than Bostic, committee members include: Mary Kepler, Atlanta Fed Senior VP and Chief Risk Officer David Benck, Senior Vice President and General Counsel, Hibbett Sports Sudheer Chava, Alton M. Costley Chair and Professor of Finance, Georgia Institute of Technology Denise Dias, digital finance policy, regulation and supervision expert, CGAP-The World Bank-Toronto Centre Andrea Donkor, Vice President, regulatory relations, PayPal Timothy Flacke, Co-founder and Executive Director, Commonwealth John Garratt, Executive Vice President and Chief Financial Officer, Dollar General Mark Pearce, Director of the Division of Depositor and Consumer Protection, Federal Deposit Insurance Corporation Bruce Renard, Executive Director, The National ATM Council Inc. Courtney Robinson, Head of Financial Inclusion and Public Policy Development, Square Inc. Bob Skiba, Executive Vice President, InComm Payments John M. Turner Jr., Chief Executive Officer and President, Regions Bank Silvanus J. Udoka,Ph.D., Dean of the School of Business Administration, Clark Atlanta University Robert Ward, Senior Vice President, Global Payments Brian K. Williams, President, First Farmers and Merchants Bank in Columbia, Tennessee

It has been clear throughout the past year as the world has dealt with the ravages of the COVID-19 pandemic that cash isn’t going anywhere. What has changed, however, is how people want to be able to access their cash. As the COVID-19 pandemic began to make its way through the U.S., local and state governments began to lockdown. While deemed essential businesses, many financial institutions severely cut down on their necessary staff, closed locations, or curbed their hours. And yet, the demand for access to cash is still there. Increasingly, customers are seeking self-banking ATMs to conduct basic banking transactions, including accessing cash. This means good news for Independent ATM Deployers (IADs) who have the opportunity to collaborate with banks to provide easy access to cash throughout localities. In August 2020, MetaBank, N.A., a financial institution that serves consumers who are often overlooked by traditional banks, conducted a survey of over 1,200 people in the U.S. The survey focused on how respondents felt about post-pandemic cash and ATM usage. The results can help financial institutions and IADs identify ways to improve service to their customers. Cash Remains Strong During COVID-19 While many people thought that cash would begin the inevitable fall of cash in America, survey results found otherwise. The majority of respondents (55%) still accessed cash in spring 2020. Additionally, 59% of respondents said that their views on the use of cash have not altered. What has changed, however, is that 24% of respondents stated that they were less likely to visit a bank branch as a result of the pandemic. Self-Service is the Future What was also apparent is that self-service banking is the future. 43% of respondents said that they were interested in self-service activities completed at an ATM rather than in a physical bank branch. Over 19% of respondents stated that they’d prefer to complete simple self-service activities at an ATM. These activities include accessing cash, making deposits, and cashing checks. Also noted was the ability to video conference with a remote teller. The Role of an IAD With bank branches closing nationwide, IADs have the opportunity to step into the fold by providing access to ATMs throughout local communities where bank branches may have closed. For banks wanting to provide ATM access to their customers without having to manage a fleet of ATMs, constructing a branding agreement with an IAD allows this. With cash demand still remaining strong at the same time as bank closures are increasingly common, IADs are finding ways to fill the growing demand for self-service banking. When IADs and banks partner, both parties are able to increase their customer base. It’s a win-win situation.

The COVID-19 global pandemic has brought about many changes in the everyday life of citizens. From how we go to work and school to how we buy groceries and socialize with our loved ones, this past year has had an effect on just about every corner of our lives. Industries across the board have found a need to adjust as well. Restaurants have switched to catering more to takeout customers, businesses have had employees largely working from home, and the Arts industry has pivoted to remote offerings. The banking industry is no exception. Even before the global pandemic, banks were steadily shifting away from in-person services to more online service options. From applying for loans to moving money between accounts, banks have moved a lot of services out of branches and onto computers. A Boon for ATMs This has meant good things for the ATM industry. Cash is a steady need in our society. With more and more bank branches closing, increasingly so during COVID-19, more and more people are turning to ATMs for their cash and banking needs. In a MarketFoolery interview with The Motley Fool’s Chris Hill, when asked about some pending business merges guest Jason Moser stated, “To me, when you think a little bit deeper, this is really about the transformation of the physical banking branch. Being able to do more and more stuff via the ATM versus actually, I need to go into the actual branch, I think that’s something that does exist, I think that’s a strategy that exists out there today. It’s not just about going to an ATM to get cash, it’s about automated banking, it’s about having essentially a smaller branch, a branch that you can do just as much with an ATM as you would with a physical branch and you don’t have to staff the physical branch, you don’t want to pay for the real estate for the physical branch.” Moser went on to say, “[I]nterestingly enough, the ATM business, in 2019, grew revenue 29%, and that goes toward that being able to do more banking via ATM versus actually having to go to the branch. But they offer all sorts of different solutions, it’s not just a hardware ATM business, it’s customer-facing digital banking, digital connected services, software solutions, ATM management systems and software, payment processing.” As ATM technology continues to evolve and become more advanced, the banking industry will likely continue the shift to relying on ATMs for customer servicing. From applying for a home loan to paying your utility bill, the future of ATMs is not just about providing cash to society, they are increasingly about providing much needed services for society at large.

The banking industry has been changing for some time. The move toward technology, efficiency and changing services has brought about a shift in the financial services industry. However, due to the coronavirus pandemic that the world has been battling for the last year, the financial industry has been transforming at a rapid pace not previously seen. This transformation has led to the empowerment of cash management outsourcing. Since the arrival of COVID-19 in the U.S. in late 2019 / early 2020, financial institutions have moved away from more simple cash management services so as to focus on more complex financial transactions while maintaining social distancing needs and adjusting bank operating hours and operations. Part of this change has been outsourcing some of the cash management responsibilities. Outsourcing ATM cash management to independent businesses can be both cost effective and help to ensure that cash is sourced and distributed in a timely manner. Advantages of Outsourcing Cash Management Here are some of the advantages of outsourcing cash management services: Forecasting – Reliable cash management providers can help provide insight into demand levels and efficiency so that ATMS are adequately stocked at all times. Management – Cash management providers can help balance ATM errors, resolve customer disputes, and keep ATMs stocked at all times. Workforce Resources – With cash management being handled by an independent business, internal financial institution resources can be reassigned to more pressing tasks. Increased Customer Satisfaction – With well-stocked and reliable ATMs, customer satisfaction increases, which, in turn, increases customer loyalty. Due to the COVID-19 pandemic, financial institutions have necessarily made significant changes in their operations. However, that hasn’t meant any less of a need for cash services or distribution of cash into society. By outsourcing cash management operations of their ATM fleets, financial institutions are able to refocus their workforce to provide more in-depth, personalized customer services. The changes in how financial institutions are likely to last long after the global pandemic has been relegated to the history books.