The final quarter of HPE’s financial year 2018 has just come to a close and the press announcements and analyst reports are...
The strange death of Cash
A review into the use of Cash has just been launched in the UK. Interestingly the review is being funded by LINK UK, the national ATM Operator, and is to be led by the former head of the UK Financial Ombudsman, Natalie Ceeney. The aim of the review is to establish how to protect access to cash for those members of society who need it. The cost to society of cash, from the design & printing of banknotes, to the ATMs that distribute them, runs to a total of some £5 billion per year.
As we increasingly race towards a digital future where payments are made not only with cards but with mobiles (i.e. any way but cash), there are still between 6-7% of the UK adult population who still rely on cash. This is either because they choose not to trust digital methods, seek anonymity, or perhaps may have previously experienced a budgeting crisis and need to exercise a degree of control over their expenditure.
Other pressures are having an effect on the UK ATM market. At a time when banks are scaling back their branches and in some cases reducing access to Cash Machines ATMs, then this represents potential challenges for those needing access to Cash.
Link already has started to reduce its interchange fees, the fees that Card Issuers pay to ATM operators to provide fee-free ATM cash withdrawal capability across its network.
There has already been a 6% year on year fall in the number of ATM transactions. Further falls may result in the closure of still more ATMs. Is this reduction in the interchange fee likely to encourage ATM operators to shut down their least profitable ATMs? Are we likely to see ATM deserts; areas where the demand for cash is so small that no ATM is to be found?
So what is the global trend? Are there similar patterns around the world? While some of the smaller Nordic countries are experiencing cash-decline for some time, other mature economies, for example the United States, continue to remain a cash-dominant country. Cash remains the most anonymous of mechanisms for trade. According to the Federal Reserve, some two thirds of all issued US Dollar bills remain in circulation OUTSIDE the US. Which is one of the reasons why the Federal Reserve is extremely unlikely to ever withdraw any of the high-value bills! The US Dollar is truly a global currency if only one third of its notes are within its own borders. Foreigners hold it as a true store of value. There is little risk of the US Dollar disappearing any time soon.
Globally the picture is much rosier. The number of ATMs across the world continues to grow, with an ATM installed somewhere on the planet every 3 minutes. China now boasts even more ATMs than the USA, while India’s goal is to have an ATM within 15 minutes’ walk of every citizen across this vast country. We are heading towards a global population of some 4 million ATMs within the next 3 years, and the range of services they offer are growing too. OmniPayments remains at the heart of helping ATM Operators to distribute cash on a cost-effective basis, while supporting value added services such as Bill Payments, remittances, charity donations, mobile top-ups, card-less withdrawals, e-wallet top-up, lottery tickets, couponing coin dispense, and many more transactions, efficiently and at low-cost.
The transaction mix varies from country to country. In fact some countries have dedicated ATMs for particular services like Passbook updates and Bank note deposit. We foresee a growth in card-less transactions as an increasing number of consumers leave their cards and home, and choose to use their Mobile Apps to interact with their bank and to withdraw the cash as they need it. Many ATM operators no longer require a PIN, but a Fingerprint as a method of Authorisation. OmniPayments enables this key biometric feature for its users. We also foresee ATMs will be used for customer onboarding as this process becomes more digital; OmniPayments will be ready for this as e-KYC takes hold. And even at this early stage, Blockchain deployments by OmniPayments are within easy reach!
The world population of ATMs grows, and OmniPayments remains committed to serving the ATM community whatever service the consumer wants, and wherever the consumer requires it.
Craig steers Business Development for OmniPayments across the EMEA & Asia regions.