Transaction volume at automated teller machines is going down as more people use their debit cards for purchases and to get cash back at the point of sale, according to two recent studies.
Monthly ATM volume has been slipping for the past decade, according to the annual EFT Data Book, a report published last week by ATM&Debit News, a sister publication of American Banker.
This year the monthly transaction average per machine likely will drop 3.7% from last year, to 2,131, the study found, or 66.7% less than the 6,399 reported for 1996.
Dove Consulting Inc., a Boston division of Hitachi Consulting, observed the same trend in its own ATM study, published this month, though the two studies had different methodologies and came up with different numbers.
According to Dove, the monthly transaction average at ATMs in bank branches has fallen by 7% a year since 2004, to 3,651 this year; volume for off-premise machines, including both bank and nonbank machines, has fallen at 8% a year and will reach 1,807 this year.
Industrywide, the Data Book projected, the total number of transactions at U.S. machines this year will drop 4% from last year, to 10.1 billion. The decline would be the second in as many years. The report has long been considered one of the most comprehensive on the ATM industry.
Dove's study, which was conducted for the first time this year, predicted that there will be 8 billion ATM transactions this year.
Tony Hayes, the managing director of Dove, who compiled its study, said the industrywide transaction total is less important than the per-machine figures. "What you care about is how my individual machine is performing."
Transaction volume per machine has been falling for two years at 89% of large banks, he said.
Dennis Racine, the vice president of bank card services for Chittenden Corp., which owns five New England banks, said use of the Burlington, Vt., company's 150 ATMs is down, though he could not provide exact figures.
Mr. Racine attributed the drop "to non-Chittenden cardholders wanting to avoid fees," and the company's own customers' preferring to get cash back when they use their debit cards to make purchases.
The drop has had "particularly bad timing," because Chittenden has recently upgraded its ATM fleet to comply with the Triple DES security mandate, he said. "We put a lot of money into ATMs that are getting less and less usage, but that's the cost of doing business."
According to the Data Book, the number of ATM transactions in March fell 4% from a year earlier, to 842 million. However, PIN debit transactions at the point of sale jumped 22.8%, to 840 million.
Mike Marzec, the manager of electronic banking for First Horizon National Corp. in Memphis, said that its customers used its 560 machines about 6% more last year than they did in 2004, but that use by noncustomers has been falling by about 4% a year for the past several years.
That decline has hurt the company's bottom line, because surcharge fees from non-bank customers are "where you make your revenue from," Mr. Marzec said. In addition, the cost of complying with Triple DES added "more expense to our ATM network."
According to Jeffrey Green, the group editor of ATM&Debit News, the Data Book is compiled using two major sources of information: transaction figures from the major debit card networks that track such data, and estimates from the largest ATM deployers of the number of annual "on-us" transactions.
The debit networks do not record on-us transactions - use of a bank's machine by the bank's customers - because they never leave the bank's systems. The transactions account for about three-quarters of all ATM transactions.
The Data Book measured on-us transactions in December, and Mr. Green said holiday shopping volume could have skewed the results. The networks' numbers we taken from March figures.
ATM&Debit News discusses its results with consultants and analysts before publication, he said.
Mr. Hayes said that Dove went directly to the ATM deployers and asked them how many transactions were conducted on their machines. The company received responses from 161 deployers with about 134,000 ATMs, or about a third of the U.S. total.
The deployers included including large and small banks, large and small credit unions, and large and small independent sales organizations, he said. Covering every major deployer sector was important for accuracy, because, "the transaction profile of the ATMs in each of these segments is different."
For example, ATMs at a large credit union branch average about 5,600 transactions a month, he said, while those operated by a large ISO average only 328.
