Digital Banking

What's the future of retail ATMs?

Will retail ATMs become the one stop shop for self-service banking? What's holding them back, and what's really on the horizon for these machines?

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August 19, 2026 by Bradley Cooper — Editor, Connect Media

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Are retail ATMs going to become the biggest self-service banking tool? Industry experts have predicted for quite some time that retail ATMs can play a crucial role in meeting the customers where they are. After all, bank branches are continuing to close, with most recent data showing under 69,000 branches in the US, according to statista.

There are many actors that can fill this role, including independent ATM deployers that provide cash access in underserved areas across the U.S., with some data showing they operate 60% of all ATMs in the country. But IADs face significant hurdles in proving the kind of advanced tools that would make self-service banking possible, and those hurdles aren't just financial. They raise questions for what the future of retail ATMs will look like.

The hurdles

Yonas Marcos, president and CEO of Star Financial Services, which supports ATM equipment, processing, branding, and outsourcing, stated in an email interview that the financial component isn't the full story behind the hurdles for IADs to adopt advanced ATM features. Much of it boils down to business models.

"Add bill payment, bill breaking, cash-to-card, gift card issuance, or deposit acceptance, and you're not just buying new hardware; you're changing what kind of business you are. Most of those services push you into money service business territory, and MSB isn't a label you bolt on lightly," Marcos said.

In order to do this, IADs have to embrace several operational and regulatory standards, such as registering with the FinCEN, setting up anti-money-laundering compliance, filing any suspicious activity, and "finding a bank willing to sponsor you as an MSB."

"Cost is real, especially at the hardware and software layer. But the operational and regulatory lift of becoming and staying compliant as an MSB is just as big a barrier, and for a lot of IADs sizing up whether to add these features, it's the bigger one," Marcos said.

Another hurdle is with mobile integration in ATMs, as it brings together so many different actors including the card, issuer, bank and processor.

"It's telling that the banks with reliable phone-tap withdrawals today, Bank of America, Chase, Wells Fargo, are the ones who own both ends of the transaction: their own ATMs and their own cardholder relationship," Marcos said. "Independent deployers don't have that vertical integration, so a terminal can be fully NFC-ready on paper and still fail wallet transactions, either because the processor doesn't support that exact flow on that ATM's software version, or because the withdrawal is coming off a prepaid instrument Apple Cash, for instance- which routes through Green Dot Bank that most ATMs simply aren't built to back."

The necessities

Beyond these tools, there are certain hardware features that are quickly moving from optional features into necessities, such as contactless NFC card readers.

During a webinar on ATM Marketplace, Lonnie Talbert, president of ATMIA, pointed to the importance of customer expectations on payments, as customers are so used to being able to tap to pay that they expect that convenience at an ATM.

"The consumer expects to be able to use that card in that manner in that form at whatever device they're going to," he said.

Marcos agreed with this sentiment, stating "more than 65% of in-person card transactions in the U.S. are already contactless, and something like 85% of cards issued now carry a contactless chip. Most of the processors serving IADs have caught up and support tap with a physical card. That part works."

He further added that "physical card tap is table stakes; get it done," whereas phone wallet tap will take some more work to make it "reliable across the board."

How close are IADs to becoming a one-stop shop?

Marcos said that although IADs are closer than they were five years ago, there is still work to be done. One major component is driving deposit automation and image-based deposits.

For that to happen, the technology will need to come down in price, and regulators and banks will have to be more willing to work with nonbanks.

"That last one is the slowest gear to turn. We are seeing movement; recent industry numbers put ATM-as-a-Service adoption at roughly 19% of banks already outsourcing their full ATM network, with another 24% planning to within two years, so the appetite is clearly building. But full retail self-service banking, where an IAD-run terminal functions like your local branch, is still an emerging category, not an established one. We're in the early innings, with the direction of travel pretty clear," Marcos said.

The cost component

Of course, small businesses have to consider costs, as does any business. To handle this, it is a good idea to change one's mindset about the upgrade cycle itself.

Kit Patterson, senior software architecture and security expert for KAL ATM Software, speaking on the security side during a webinar, emphasized that it's cheaper and more efficient to be more proactive with updates, as they can be rolled out as they come rather than trying to play catch-up all at once.

Marcos agreed with this assessment, stating that it's best to file upgrades as maintenance.

"Let hardware and software age for years and then do a big-bang replacement because a cybersecurity requirement finally forces your hand, and you end up paying for the upgrade and the urgency at the same time; that's the most expensive way to do it. Budget instead for regular, smaller-scope refreshes on both the terminal OS and hardware components, so you're never staring down a cliff," he said.

He also emphasized one can save money by upgrading components as needed, such as a dispenser and card reader, as well as utilizing remote software updates to save money.

The future isn't a cash box

Where all agree is that the future of the retail ATM is not simply as a cash box. After all, for many years, ATMIA has discussed how the single-feature device is going away, and the same applies to the retail ATM, especially in an era of increasing consolidation.

"For the IADs still standing, the lesson is pretty clear: you can't just be a cash box anymore. Diversify bill pay, cash-to-card, deposit acceptance, whatever fits your footprint and your compliance appetite, and become genuinely useful to the banks and credit unions you already work with, not just a vendor they renew out of habit," Marcos said. "The operators who build that relevance are the ones who'll still be standing the next time somebody counts this list."

About Bradley Cooper

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Bradley Cooper is an experienced editor for Connect Media. He has written across a wide range of beats, ranging from food to digital signage to banking, and is the current editor of ATM Marketplace and Food Truck Operator. His background is in information technology, advertising, and writing. When he’s not crafting a story, you can find him going for a run or spending time with his wife and three sons. 

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Included In This Story

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ATM Industry Association (ATMIA)

ATMIA is the leading non-profit representing the global ATM industry, serving thousands of members across 500 companies, including financial institutions, deployers, manufacturers, and service providers. As a division of, ePayResources, our mission is to promote ATM growth and usage, protect industry interests.

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