The future of cash, ATMs — your 2020 spoiler alert


While "tech" boosters, hypemongers, fintech enthusiasts, crypto nutheads and Davos dwellers have been proclaiming that we are living on the cusp of technological "disruption" and "revolution," historians, economists and other observers have been for the last decade telling a different story. According to them, we have been experiencing an extended period of slow economic and productivity growth since the 1970s.


It's possible (given the little giggle room for monetary policy in the U.S., U.K. and euro zone) that this period of slow growth will keep on going for many years — a potential some economists are, in fact, predicting. This means wages will remain stagnant while monetary easing continues to fuel share buybacks.


If that is the case, overhyped and buzzword-laden technologies — like today's ubiquitous "AI" — and the payments nirvana promised by the likes of Bitcoin and Facebook's Libra will continue to underperform on expectations and incremental change will remain the norm. As for the ATM and cash industry, this means that the progress of digital payments in developed countries will continue (most likely at a lower rate than in the previous two years) but cash will still be around.


We can also expect continuing rationalization of bank branches and non-branch ATM locations. Pressure on the bottom line of ATM manufacturers is unlikely to abate as is the consolidation in the number of independent ATM deployers.


In this possible future, our cash infrastructure will continue to degrade. The ATM industry faces a challenge to move beyond Windows 10, but the path is not clear. Next-Gen is an industry-wide alternative that still has to prove itself. The debate on operating systems is likely to remain unresolved. So will the impetus and research to deploy large-scale cryptocurrencies. But if the head of the Bank for International Settlements gets his way, these will remain the remit of central banks and very large financial institutions.


In terms of infrastructure, with FedNow having launched in the summer of 2019, the U.S. joins other nations with a faster payments facility. Examples from Australia and the U.K., among others, suggest that a faster payments infrastructure has been key in the migration from cash to digital (particularly to enable so-called "tap and go") in the retail payment space. But although the volume of personal checks cleared in the U.S. has declined since 2014, it remains in the hundred millions of items per year while the U.S. clears about 70% of the world's personal checks.


At the same time, the greenback remains 75% cotton and 25% linen plus security features, and the unabated strength of the cotton lobby makes it unlikely for the U.S. to adopt polymers in 2020 or that digital payments engulf "Main Street" in a perfect storm.


Middle managers, ATM engineers and others might want to capitalize on the opportunities offered by digital payments, cryptocurrencies, fintechs, etc. by creating cost-effective solutions for consumers to adapt to their ever-warming world and incremental developments in payment systems. But designers might also find their work increasingly casualized and precarious, as employers turn to temp labor and Uber-like apps that define designers and engineers as "partners," not employees.


This isn't your grandparents' dystopia — a Blade Runner-esque hellscape of skyscrapers, androids and flying cars — nor is it Neo and Trinity feeling the sun on their faces while breaking away from the Matrix, but rather something not much different than what we live in now, just continuing to molder.


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