Fewer ATMs in the future: RBA

SAMANTHA WOODHILL
December 7, 2017
The Australian 

Australians may soon see fewer ATMs as use of cash teller machines continues to decline, but the number of ATMs remains close to its peak level.

In addition, the cost of deploying ATMs continues to rise, according to the report Recent Developments in the ATM Industry published by the Reserve Bank of Australia.

“Having multiple bank ATMs side-by-side or in close proximity, as can often be seen in shopping centres for example, will make less economic sense now that all or most of those ATMs are fee-free,” a report said. 

The proportion of independently-owned ATMs is also at a peak level now at 57 per cent, up from 55 per cent in mid-2015 and 49 per cent in 2010. But the number of independent ATMs, commonly charging high withdrawal fees, is also likely decline as a result of the move by the big four banks to scrap foreign ATM fees and the subsequent ease of consumers to withdrawing cash fee-free.

“Those ATM deployers that continue to charge withdrawal fees — particularly independent deployers, who typically charge the highest average fees — may face additional competitive pressure, especially where they have ATMs in close proximity to fee-free bank ATMs,” the report said.

“That said, many independently-owned ATMs are in convenience locations not serviced by bank ATMs, such as pubs and clubs, and so they may be shielded somewhat from this competitive pressure.” 

The declining use of ATMs comes as the number of cash transactions also declines, following widespread adoption of contactless card payments.

“While it is too early to assess the full impact of the recent announcements by the major banks, it is likely that they will focus attention on the growing disparity between the number of ATMs in Australia and the demand for ATM services,” the report said.

“Some consolidation seems likely, and may even be desirable for the efficiency and sustainability of the ATM network, though it will be important that adequate access to ATM services is maintained, particularly for people in remote or regional locations, where access to alternative banking services is often limited.” 

The banks that have eliminated withdrawal fees are unlikely to see a major reduction in revenue as a result, given the decline in ATM use, and that withdrawal fees paid at ATMs owned by the major banks only totalled around $50 million in 2016/2017, the report said.