Article

Here to stay: folding money and forward-thinking ATM operators

Webinar considers the future of cash - and the ways innovative ATM deployers can make more of it now.

December 12, 2013 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

Even ATM operators use credit cards. And online banking. And mobile payments. And on the rare occasion, maybe even a personal check. Does this mean they think cash is ready for last rites? Not exactly, as an instant poll during this week's webinar, "Cash Use: Present and Future Trends," made abundantly clear, with 85 percent of respondents saying cash won't be buying the farm for some time yet, if ever.

Presented by Cardtronics and hosted by ATM Marketplace, the webinar looked at current trends in cash use, and the numbers presented an encouraging picture, despite what the Cassandras of the credit card world are saying.

"'Cash is dead. Don't worry about it' — at least that's what the pundits have to say — 'It's dirty, it costs too much to handle, it has no place in the future of payments.' But not so fast," Cardtronics CMO Tom Pierce told the audience.

Pierce went on to say that nearly one-third of all consumer payments (and two-thirds of payments of less than $10) are still made with cash. The only payment instrument that out-rates it is the debit card — and that's only by a paper-thin margin of 1.3 percent.

In the U.S., currency growth has outpaced GDP since the early '90s, and the gap between their growth rates has done nothing but grow through the past 20 years, Pierce said.

As for ATMs, he cited research by London-based RBR that said the number of ATMs around the world could grow by as much as 44 percent from 2012 to 2018. "I'll bet the ATM manufacturers sure like those projections," he said.

In developed markets, some of this growth will be driven by the decline of the branch, as consumers continue to decrease their branch visits in favor of self-service banking alternatives.

And while digital transaction channels will continue to gain strength, they have a long way to go before they can unseat cash as a preferred payment method. According to Mercator Advisory Group, mobile payments amounted to $100 million last year, but projected cash use next year will total $1.1 trillion.

This is all good news, of course, but the question remains how ATM deployers can maximize the income from their fleets in an environment where operational expenses are going up while interchange rates are going down.

Cardtronics EVP of financial services, Bill Knoll, took on that question, describing strategies and tactics the independent giant has used to help it become, well, giant.

One of the most successful of these has been working with banks and credit unions to co-brand retail ATMs in the company's Allpoint surcharge-free network. The win-win-win-win program generates revenue for the IAD, awareness and an expanded service area for the FI, added business for the retailer, and surcharge-free convenience for the customer. 

"Today, financial institutions want to brand ATMs at premier retail locations because of the brand equity of the retailer, the value that retailer provides to shoppers and the associated foot traffic within the retail stores," Knoll said. "When financial institutions brand ATMs with a retailer, they draw their customers or members to those retail locations, creating more foot traffic for the retailer. These incremental customers withdraw cash in the store of which some amount remains in the store as in-store spend."

Knoll went on to describe other programs the company has developed to build loyalty and drive revenue, including mobile locators and text alerts, on-screen marketing, and a bank-branded transaction experience that is familiar and customized to the customer.

The constant focus on the FI and the FI's customer has been critical to the company's success, Knoll said.

"At the end of the day, Cardtronics itself is just a retailer. We're a retailer of cash. And we've found that the best way to grow your business is by providing outstanding consumer experiences in accessing cash."

The complete one-hour webinar, with Q&A session and slide deck is now posted at ATM Marketplace and will be available for replay for one year. 

Read more about ATM innovation.

photo: chris potter

About Suzanne Cluckey

---

Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.