As Cash Becomes Quaint, Are ATMs On Path To Obsolescence?

by PaymentsJournal 0

Before the advent of the internet, the greatest gain in customer convenience within retail banking came from the creation of automated teller machines (ATMs).
ATMs led to significant advances in how customers access financial services because – coupled with the direct deposit – they freed workers from so many routine tasks. No more depositing a paycheck in person, inquiring about balances or paying utilities solely during banking hours. ATMs enabled impromptu dinners and last-minute shopping over the weekend.
But now that we have so many other alternatives to fulfill our banking needs – we can deposit a check with a snap from our smartphones – do we really need ATMs? Why do we require physical cashpoints given that mobile payments and e-commerce continue to grow, heralding the “death of cash”?
Claims that the ATM is a passing technology are almost as old as the idea of a cashless society, and for a variety of reasons it’s probably premature to predict its demise.
The rapid embrace of the digital and resistance to the traditional by today’s youth may eventually bring about the ATM’s end, but for a long time to come, the ATM will likely remain central to our relationship with money.

While many in the banking and payments industries have long been predicting the demise of cash, it is not going to happen anytime soon in the U.S. Even with the continued growth of electronic payments, there are many people who prefer to use cash for various purchases. Recent government projections on the amount of cash in circulation indicate a slow decline in cash use, at least in the near term. This suggests that the cashless society is aspirational at best, with any significant reductions in the use of cash being in the distant future.


Overview by Ed O’ Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group

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