Not long ago, in 2017, ATMs celebrated their 50th anniversary. Their inauguration in 1967 changed the way banking worked, allowing for financial transactions without the direct involvement of bank staff.
The automated teller machine serves as a cash dispenser, primarily. It does allow you to make deposits, transfer funds and check your account information. Barclays Bank of London installed the first modern ATM in 1967. There were many more machines alike to it prior to 1967. Its birthday, and hence, the birthday of ATMs was on June 27th, 1967. Its creator was John Shepherd-Barron and his engineering team.
The 50th anniversary of ATMs, however, is marked by rather ominous reports.
The Decline of ATMs
ATMs are still widely used as cash dispensers throughout the world, yet people have been turning away from paper funds. Cashless transactions have been much more frequent, thus the decline in usage of ATMs.
The Economic Times reported a probable ATMs installation growth by 4% from 2015 to 2020, on a global scale. Cashless transactions grew by 52% compared to 33% of ATM transactions from 2011 to 2015. This paints a gloomy picture for ATMs. Notably, there were 99 billion cash withdrawals compared to 471 billion cashless transfers in 2015.
Despite that, ATM installations are probably going to reach 4 million in 2021, according to Retail Banking Research.
The Alternative – Cryptocurrencies
The somewhat enigmatic arrival of cryptocurrencies filled people with enthusiasm, then negligence, then it took off. A cryptocurrency is a form of digital currency, used for financial transactions. It is different from money and banking in the sense that it does not belong to a centralized system. Centralized systems are banks. Decentralized systems used for cryptocurrencies use a peer to peer network. Rather strong cryptography, usually a variant of the SHA-2 standard, makes financial transactions secure.
The advantages of such a system are that there is no central point of failure. A decentralized system allows for more security for the user, which is another advantage.
Many companies and startups have started turning towards cryptocurrencies as a means of transfer. “Pundi X has run pilot projects using point of sale machines for retail transactions in Hong Kong” Business Standard reported on September 6.
Similarly to Pundi X, NetCents reported an increase of retailers accepting cryptocurrencies, including Microsoft, Subway and Shopify.
Without cryptocurrencies, cashless transactions are presenting ATMs with a challenge. Add to that an increase in widespread cryptocurrency acceptance and retail implementation, ATMs are surely going to have more competition.