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The future of ATMs

Nurdianah Md Nur | July 29, 2016
What's the role of automated teller machines (ATMs) as we move towards becoming a cashless society?

While cash is still a common mode of payment today, banks have been aggressively promoting cashless transactions -- be it via contactless credit or debit cards, their own mobile apps or third-party digital wallets such as Apple Pay or Android Pay. Does this mean that automated teller machines (ATMs) will no longer be relevant in the future cashless society?

The short answer is no if ATMs can "carry out multiple functionalities" apart from dispensing cash, said Biswajit Jha, Managing Director and Vice President, ASEAN, Diebold Incorporated.  

In an exclusive interview with Bank IT Asia, Jha also shared how Diebold's new offerings will help bridge the physical and digital worlds of cash.

The first offering is Janus, a dual-sided self-service ATM that is able to serve two consumers at the same time. It is mobile-enabled with NFC and QR code authentication, as well as incorporates tablet-like touchscreens.

As for Irving, it is a screen-less ATM that dispenses cash with no card required and uses iris-scanning for authentication. Since most of the transaction takes place on the customer's mobile device, users can complete a transaction in less than 10 seconds, according to Diebold.  

With the rise of mobile payments apps and contactless payments, what will be the role of ATMs in future?  Smartphone penetration has seen exponential growth in last 5 years and many markets in the Asia Pacific region (Singapore, Hong Kong, South Korea, Australia) have over 80 percent penetration of smartphone. This, along with various apps being launched by banks and fintech companies, has created a lot of buzz around mobile payments. However, none of the players have been able to garner a major share, which is a must for any payment system to be successful.

Contactless has been an accepted norm in Singapore (EZ-Link) and Hong Kong (Octopus card) and we are now seeing the growth of contactless payment usage beyond transport. With the launch of Apple Pay, Samsung Pay and the contactless card from banks, we can expect over 30 percent of transactions as contactless payments in next 1 to 2 years in developed markets.

Cash transactions as a share of payment have not changed in most markets. However, if we take China as an example - where 70 percent of all e-commerce payments were cash on delivery in 2009 as compared to over 70 percent through mobile payments in 2015 - we can expect to see some major shift in cash payments. ATM for simply cash withdrawal will reach a stagnation point, but we will continue to see growth in cash recycling and ATMs which can carry out multiple functionalities like card top up, account opening, card dispensing and contactless transaction.

 

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