Despite predictions of a “cashless society” eventually emerging, cash will remain the primary payment method by volume for retail payments for the foreseeable future throughout the world. As such, banks should maintain or expand their ATM channels, with a strong focus on efficiency, one technology analyst contends.
“If you look at the [Federal Reserve] or central bank statistics from various countries, they point to a steady growth in cash transactions,” says Jeroslaw Knapik, senior analyst at Ovum, a New York-based unit of Datamonitor group. “I know debit and mobile will grow, but overall the number of payments is going up overall, and the number of people also is increasing.”
Knapik cites as examples data from the European Central Bank that show the number of banknotes in circulation in the Eurozone rising by 9% annually, while he says Fed statistics show a 40% rise in the number of U.S. dollar bills in circulation since 2000.
Because many consumers get their cash from ATMs, Knapik suggests banks work to improve the efficiency of their ATM operations to lower the cost base. Part of that process should involve evaluating how many vendors the bank has under contract to provide various services, he says.
“There’s always a need to decrease costs,” he tells PaymentsSource. “The trend is to minimize to gain more efficiency.”
In the U.S., where the ATM market is saturated, most of the efficiency analysis will focus on aging-machine replacement and whether to support operations in-house or through outsourcing, Knapik says.
The major ATM makers have identified this trend and are placing greater emphasis on providing direct ATM-management support (
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