Payments
Where's cash headed in 2025?
Where is cash headed in the 2025? What about ATM usage and recyclers?
November 29, 2024 by Bradley Cooper — Editor, ATM Marketplace & Food Truck Operator
Cash usage is a top of mind concern for the ATM industry. For years, various payments gurus have been declaring the death of cash. While that hasn't happened, there have been shifts in cash usage. The Federal Reserve Bank's statistics revealed a massive drop in cash use in 2020, but since then it has remained largely steady in use, pointing to the possibility of a floor to cash usage.
But where is cash headed in the 2025? What about ATM usage and recyclers? To learn more about this topic, ATM Marketplace spoke with Jodi Neiding, Vice President, Americas Banking Portfolio, at Diebold Nixdorf.
Q: What has cash usage been like compared to 2023 with consumers?
Neiding:We've observed significant shifts in cash usage compared to 2023. While cash remains integral within the banking landscape, especially for specific demographics and markets, we're cognizant of the ongoing trend toward digital transactions. Specifically, we're witnessing a major shift in consumers increasingly opting to utilize mobile wallets, credit and debit cards, and other electronic payment methods. This change is driven by convenience and the growing acceptance of contactless payments, particularly among younger consumers. However, cash and ATMs still play a critical role in our global banking ecosystem. Physical cash provides essential access to cash for those who prefer it, including adults and individuals in cash-dependent and underserved communities. According to FRB, in 2024, cash was used for 16% of payments, making it the third most-used payment method after credit and debit cards, aligning similarly with the stats we've seen in 2023. At Diebold Nixdorf, we're continuing the journey of revolutionizing our technology offerings to integrate with next-generation digital builds, ensuring that all customers have a seamless experience. As we move forward, we're focused on enhancing the user experience, evolving physical and digital security features, and expanding our ATMs' capabilities to meet consumers' diverse needs.
Q: In recent years, we saw a trend of customers making fewer trips to the ATM but withdrawing larger amounts. Is this still the case? Why or why not?
Neiding: We are continuing to see this trend as many consumers still rely on cash. Inflation is driving higher withdrawal amounts. With the cost-of-living increase, consumers have become more reliant on cash to help them stay within their budget. But the price of goods and services has increased so customers need more cash for the exact same purchases. In addition, some consumers are going to the ATM less often but withdrawing larger amounts to cover the extended time until their next visit.
Q: What are the biggest areas where cash usage is strong?
Neiding: In regions with limited banking infrastructure, cash remains a primary payment method for residents who may lack access to digital banking. Older generations of consumers often prefer cash for everyday purchases, further valuing cash's tangibility and ease of use. All over the world, and especially within the U.S., we're witnessing a spiking trend of banking deserts, which encapsulates a census tract without a physical bank branch within a certain radius of its population center, further promoting limited access to financial services for customers. While traditional bank branches might be closing, we're also seeing the continued adoption of alternative forms of means to withdraw cash, including video tellers, drive-through ATMs, and more, all promoted by streamlined technology like cash recyclers. Moving forward, and especially with the rise of global financial institutions re-imagining the future of the bank branch, we predict this shift will ultimately promote the withdrawal of cash.
Q: What role do you see cash playing in 2025?
Neiding:In 2025, cash will likely maintain a significant, though evolving, role within the banking landscape and the broader financial services space. Cash will remain essential for those without access to digital banking or who prefer cash for budgeting and control over spending. In times of economic uncertainty or system outages, cash serves as a reliable fallback, reinforcing its importance as a stable payment method. Specific sectors, like small businesses or community markets, will continue to rely on cash transactions, making it a vital commodity for everyday operations. In some regions, especially within the rising trend of "banking deserts," cash will still be favored due to cultural habits or trust issues with digital systems. As more non-traditional outlets for banking continue to rise, we still predict cash to serve as a trustworthy mode of payment for all consumers around the world, even as physical and digital channels continue to merge.
Q: What about cash recyclers in 2025? Will we see new features?
Neiding:Cash recycling has become an integral part of the banking ecosystem in many areas across the globe where access to cash is vital to financial inclusion efforts. In the United States specifically, automated cash recycling is proving to be a compelling solution that provides substantial benefits to financial institutions. Moving to 2025 and beyond, we're looking at further optimizing and expanding our cash recycling offerings, including improving cash management costs for our customers and promoting optimization, all while continuing to meet the evolving security requirements and risk factors our customers continue to face. Holistically, cash recycling offerings show no signs of slowing down. The technology is a massive opportunity for all financial institutions to not only automate cash deposit transactions but also simultaneously help lower costs, maximize efficiency, and enhance the customer experience through streamlined self-service offerings.
Q: Anything else to add?
Neiding:It's no secret that the role of the branch and ATM is changing, and global banks are looking for differentiated touchpoints to meet unique consumer demands while reducing costs. As we look towards 2025, we're more focused than ever on leveraging our hardware, software and service solutions to continue promoting financial inclusion worldwide so consumers can transact when, where and how they want.
About Bradley Cooper
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Diebold Nixdorf
As a global technology leader and innovative services provider, Diebold Nixdorf delivers the solutions that enable financial institutions to improve efficiencies, protect assets and better serve consumers.
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