ATMs on the decline

Clancy Yeates
July 10 2016
The popularity of digital payments appears to finally be cutting back the number of automated teller machines, as consumers take out cash less frequently.
ATM withdrawals have been steadily heading down for several years now, yet despite this, until recently the number of machines around the country had continued grow.
The number of ATMs – introduced widely in the 1980s – reached an all-time high of more than 32,000 in the September quarter last year.
However, that size of Australia’s ATM fleet has now declined for two quarters in a row to 31,522 in March, figures from the Australian Payments Clearing Association show.
It is the first decline in ATM numbers since 2013 and comes as analysis from Finder.com.au also shows the number of withdrawals a year is running at its lowest level in more than five years.
Finder spokeswoman Bessie Hassan said in the year to April there were 685.8 million cash withdrawals at ATMs around the country – a decline of 43 million, or 6 per cent, in one year. The RBA also last year predicted ATM numbers would fall as digital payments displaced cash.
Yet experts and banks are not predicting the death of the ATM just yet.
That is because even though cash is declining, banks are looking to the machines as a way of automating more transactions that were previously processed by people in branches.
Alan Shields, managing director of advisory at financial researchers RFi Group, said ATMs would probably be around for many years to come, and the machines most likely to be removed were often in lower-use locations.
“I think what we will see first is a bit more of a rationalisation of the network,” he said. “I think we will start seeing them being removed from 7-11 type places, and some of the petrol stations.”
Banks’ ATM networks cost more to maintain and provide than they produce in revenue, but Mr Shields said they could be used by banks as a substitute for branches, which are also gradually falling in number. Major banks also pointed to their investments in more advanced ATMs.
ANZ said its number of machines had dipped by 10 in the last year, to 2596, and it was spending on features such as contactless ATMs, and those that allow deposits without a card.
“ATMs play an increasingly important role in how our customers access their money,” the spokesman said. “ANZ has been investing in ATM capabilities as part of our retail distribution network as we adapt to the changing needs of our customers.”
CBA, which had 4393 ATMs at the latest half, said in the latest half the machines’ share of transactions fell from 12 per cent to 10 per cent year on year.
NAB said it had about 1350 of the machines and this was “largely unchanged,” and pointed to consumers demanding more advanced ATM machines.
“More customers want to use self-service options to do their banking, including ATMs that now allow customers to make deposits, check their balances, print statements and withdraw cash,” she said.
A Westpac spokeswoman said the bank had about 3000 ATMs in its fleet and this had not meaningfully changed for several years. She said the bank had no plans to cut investment in ATMs and was also focusing on introducing more advanced features.
Machines owned by specialist ATM businesses are more likely to be culled than those owned by banks. That is because their revenue was crunched by 2009 rules requiring customers be notified of fees they would be charged for using an ATM outside their bank’s network.