Blog
Like empty beer cans, Australian ATMs are being crunched!
A report by the Reserve Bank of Australia says that "it is likely that ATM numbers will begin to fall, given the observed decline in cash use and ATM withdrawals."
September 15, 2015 by Richard Buckle — Founder and CEO, Pyalla Technologies, LLC
My focus of late has been drawn to my old stomping grounds, Australia. Watching the rugby (we managed to win one game against the mighty New Zealand All Blacks) or the cricket (we threw away the "Ashes" to those dreaded Pommies losing by just a single test match).
I'm very much an Aussie at heart so, I will just sit quietly and take it all in over a beer, bought with the change I had remaining after some poorly directed bets, and ponder the big question: Will Australians' reputation for being prolific beer drinkers prove to be the salvation of the ATM? Will that late afternoon "schooner with the boys" be the last holdout for cash?
Australians since time immemorial have loved partaking of the amber liquid but it's never been about plastic. It's always been about cash — so much so that the switch to plastic banknotes was in part influenced by the rapid deterioration of paper money left too long on a bar awash with beer.
But as a people who embraced ATMs almost from the day they were invented, Australians have begun to rethink this welcome. Indeed, there's even talk that the deployment of ATMs has peaked and very shortly might begin to decline.
According to a report by the Reserve Bank of Australia cited in The Sydney Morning Herald, the future of ATMs down under is anything but rosy:
The Reserve Bank has predicted a decline in the number of automated teller machines, as digital payments allow consumers to make fewer cash withdrawals and avoid pesky fees. ... Banks and other owners of ATMs say their returns from the machines are being crunched, as they spend more money on maintaining machines that are being used less.
When I read about the machines being crunched, all I can visualize is the practice of crunching empty beer cans. But a submission by the Reserve Bank to the Australian Senate predicts that, "it is likely that ATM numbers will begin to fall, given the observed decline in cash use and ATM withdrawals."
As for hard facts, the Reserve Bank told the Senate inquiry about "a long-running move away from cash in favor of cards, pointing to figures showing consumers used cash for 47 percent of payments in 2013, compared with 69 percent in 2007."
As an example of the effects of this shift, the Reserve Bank referred to Commonwealth Bank, which "made $54 million a year in revenue from ATM fees, while it cost $160 million to maintain the network"; and Westpac, whose ATMs "made a 'net negative contribution,' with costs from maintenance and security rising at the same time as customers used the machines less."
It would seem that in Australia they have ridden ATMs to the precipice and the view from the edge of the cliff isn't looking all that good.
However, in another instance of a manufacturer of buggy whips not realizing that they were part of the transportation industry, perhaps the real value of ATMs lies in their network infrastructure.
What services future ATMs might provide is the subject of speculation, but the fact of their highly sophisticated national network shouldn't be ignored. Nor should the expertise required to keep it operational be discounted, even as its end points transition to providing something other than cash. For many years there has been the thought that ATMs and kiosks are likely to merge in mature markets, and this is one possible outcome. But wait, there's more …
The priority we place on cash waxes and wanes over time; when credit cards first appeared, they were touted as being safer than cash, but today we all know that cash might very well be safer than plastic.
Furthermore, the more we depend upon the digital world, the more anxious we become, knowing that with a click of a keyboard, our savings might be siphoned off in a heartbeat.
I'm not for one moment advocating a return to stashing our cash under the bed or burying it in a flowerpot, but a balance is needed. In times of crisis, having cash on hand can be our only salvation. So please, don't disconnect my ATM! Not yet, anyway.
True Australians do not want to drink on credit nor do they want to rely exclusively on debit cards — after a couple of beers few of them could even remember where they left the darn things! No, that afternoon beer is best paid for in cash.
Keep the ATM in place and if you want to transition to providing something apart from cash, well then, how about delivering an ice cold "tinnie" or two (though beer today comes in aluminum containers). We have the network, we have the data center infrastructure, we have the provisioning sorted out securely so why not think a little outside the box. Or, for that matter, the tin!
Within every country investing in ATMs there will remain something uniquely advantageous to being able to access cash. Meanwhile, the transition to delivering something in addition to cash is only "a few lines of code" away. I'm so sure of this that even as I finish this cold beverage, I feel I just have to crunch the can for good measure. Oh yes, how forgetful of me — can you give me cash for these crushed empties I have lying on the floor?
About Richard Buckle
Richard Buckle is the founder and CEO of Pyalla Technologies, LLC. He has enjoyed a long association with the Information Technology (IT) industry as a user, vendor, and more recently, as an industry commentator, thought leader, columnist and blogger. Richard participates in the HPE VIP Community where he is part of their influencer team.
