Unemployed ATMs' anxious about their future?


"Computers are safer drivers than humans," suggested one journalist recently. "[A computer] can drive with more efficiency than a human can, and it will never fail a sobriety test. Point: It's only a matter of time before your pizza is delivered by a Fiesta driven by an ATM."


This came not from a banking magazine or even a technology publication but from the December 2015 issue of Road and Track.


With the end of 2015, there were numerous predictions written about ATMs by financial luminaries from both sides — users and vendors.


"There are now more than three million ATMs worldwide," Ron Delnevo, executive director of ATMIA Europe, wrote in a recent commentary on ATM Marketplace. "These ATMs dispense more than 70 percent of the cash in circulation – and more cash continues to come into circulation every year."


Furthermore, Delnevo wrote, "As branches disappear, ATMs take on an increasingly important role as a customer touch point. This enhanced role inevitably will lead to growth in both the number of ATMs and the types of transactions available to ATM users."


Admittedly, Delnevo is writing from a European perspective at a time when many Europeans are hoarding cash in the belief that financial institutions don't always have their best interests at heart.


However, the popular view is that as the types of transactions continue to expand, the number of ATMs deployed will contract in other regions, particularly North America.


One threat to the ATM's future is the need to further upgrade many machines this year. The MasterCard ATM liability shift in October 2016 and similar shift by Visa a year later will have a major impact on ATM populations.


"While ATMs owned by banks and large ISOs will be largely EMV ready by October, those owned by smaller ISOs and merchants will not," wrote Daryl Cornell, CEO, Triton Systems in a recent article at ATM Marketplace.


"Many of these ATMs will subsequently be upgraded or replaced; others will not. In the interim, expect a significant contraction in active U.S. ATMs in late 2016." Ouch; there's no place for old technology.


In a different article, Cornell said we can expect sponsor banks "to turn off as many as half of all retail ATMs due to financial inability of owners to cover the estimated liability shift losses."


Any mass turn-off of ATMs will herald a significant shift in the way communities interact with financial institutions.


Can we teach old ATMs new tricks? Or are the demographics simply working against ATMs as younger generations rely more on the smartphones and tablets?


According to Cornell, "The most important development of 2015 was the acceleration of the deployment of other revenue streams at the ATM — direct currency conversion, charitable donations, lottery, etc."


What of markets other than Europe and North America?


"To many observers, the words Central or Southern America are synonymous with expressions like revolution and strife of one kind or another," OmniPayments Inc. CEO Yash Kapadia told me. "However, when we look at the benefits being offered to ordinary citizens, thanks to the rollout of modern ATMs in these emerging marketplaces, it's as revolutionary as anything the continent has experienced in centuries."


Yash's solution on HPE NonStop systems continues to blossom in this marketplace.


"Government agencies have taken the initiative when it comes to ensuring stipends and other government payouts make it into the hands of their intended recipients," he said. "And this is just the beginning! With ATM networks in place and a secure manner by which cash can be distributed, interest continues to grow in what else can be done via this channel."


Then again, Yash said:


  • When it comes to mature markets like North America, however, the future of ATMs as we know them today is less clear. While some elements in society are still very much cash-centric and depend upon ATM access, these elements represent a declining minority.
  • Given the presence of smartphones in the hands of even the smallest child, cash is giving way to simpler person-to-person payment models where the popularity of virtual wallets, mobile or otherwise, continues to gain popularity.
  • Will ATMs become kiosks, perhaps hybrid in nature, even as they retain traditional ATM properties? Will ATMs become yet another hotspot for communications? Will ATMs simply be regarded as the final embodiment of an otherwise dominant branch office network now in decline?
  • Whatever transpires, the role of ATMs in mature markets is about to change, and looking at what is likely to happen this year, I have the sense that when the curtain falls on 2016, we will see the beginnings of a new era for cash in North America taking shape.


ATMs reconfigured to drive pizza delivery vehicles may be a stretch, but the point is relevant all the same. What isn't likely to happen, though, is for ATMs to be in the driving seat anywhere in 2016.


The once dramatic disruption to banking that ATMs wrought might have run its course. ATM populations in decline in some markets probably will not be fully offset by the addition of ATMs in emerging marketplaces.


The disruption to banking caused by mobile devices is hard to ignore, and whether convergence of ATMs and mobile banking helps stave off a decline in the population of ATMs remains to be seen.


But who knows — 2016 may be the year something else appears to disrupt banking yet again.


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