Article

The ATM isn't dying, it's being transformed

'Kicked the bucket? Shuffled off the mortal coil? Joined the choir invisible?' Not the essential, adaptable ATM. 

April 17, 2014

by Frederique Slevin
Senior Principal Product Manager, ACI Worldwide

A few industry watchers have proclaimed that the ATM is dead. I say that’s ridiculous — it is only adapting to new roles and requirements.

The view that the ATM is dead is built on a developed-world assumption that cash is on its way out.

While it’s true that electronic payments are growing significantly, cash still accounts for 9 percent of consumer transactions across the globe. In this world, the ATM can be a secure outpost for getting cash — leveraging its central position within a multichannel solution in order to drive revenue.

Financial institutions continue to be driven by the growing consumer trend toward self-service bank. These days, their customers are demanding greater control over their financial information, and they’re looking for additional solutions to self-manage their financial situation.

Consumers expect to be able to gain access to their account information and funds, at anytime, from anywhere, and with no limitation imposed by a physical payment card.

While mobile technology enables many services that support this trend, cash remains a strong preference with consumers, still making the ATM channel a frequent touch point to serve existing customers, as well as a place of opportunity to acquire new customers and cross-sell financial products.

In this world of sluggish economic growth and continuing uncertainty, banking executives have been squeezing efficiencies at the expense of growth. But the payments business is starting to focus on revenue growth — growth that can be achieved through the provision of innovative payment services at the ATM.

Here are four ways to improve customer interaction, loyalty and ultimately revenues:

—Customers start an ATM transaction using a keypad to enter their identification (e.g., account number, email address, phone number). This replaces the previous ID method that relied on the insertion of a card into the ATM card reader. And ultimately it draws customers with no card to the ATM channel and the ability to reduce card-related costs.

—Customers initiate an ATM transaction using a contactless payment token such as a contactless card, mobile phone or a key fob with the ATM contactless pad, improving the customer experience and paving the way to interaction with the mobile channel.

—Consumers stage transactions through their mobile devices and complete them at the ATM by using a QR code, ultimately replacing the ATM screen and key pad limitations with the promising flexibility of mobile applications.

 —Customers use the ATM channel as a  central point of remittance for person-to-person, business-to-person or person-to-small business mobile payments. While the person or business initiating the payment is an account holder at the bank, the recipient of those funds doesn’t need a bank account, which offers many possibilities to capture revenue from non-banked customers — or the opportunity to convert non-customers into stored value account or full demand deposit account customers.

Although these are not brand new concepts, they are a strong reminder that the ATM is alive and well, and is evolving to meet the needs of the world’s next generation of consumers.

To get a piece of the action, normalizing the way customers interact across all banking channels is crucial, and enabling the integration of the ATM with mobile technology is a must to continue to drive customer engagement.

The ATM is dead? No, thanks to an effective multi-channel solution, the ATM will live in its altered form for a very long time!

photo: sid mosell