The analysis at that time concluded: “Maybe it is premature to predict the ultimate demise of the ATM but its primary role as a dispenser of cash is less and less important as less and less cash is used. It’s just a matter of time until this staple of late 20th century banking morphs into something else or disappears.”
“ATM activity has been reducing at a huge rate over the last eighteen months with volumes down by more than a quarter in 2020 alone.”
Seven years (and a pandemic) down the road, it feels time to revisit a technology, which has actually remained a key network for the distribution of cash, to see if views have altered.
As a starting point, the use of cash must be a key consideration. On that score, the evidence is strong that big changes had been occurring to the way we pay. The Reserve Bank of Australia’s (RBA) surveys of consumer payment patterns have measured the share of cash payment transaction numbers by households as having fallen from 69 per cent of total payments in 2007 to 37 per cent in 2016. By 2019, this figure had dropped again to 27 per cent - accounting for just 11 per cent of the value of total household payments (down from 38 per cent in 2007).
A year after the RBA’s 2019 survey, the world suddenly faced upheaval from the COVID-19 pandemic. Several payments behaviours quickly shifted as Australians coped with avoiding infections and following restrictions.
The changes to the ways Australians worked, played and communicated did not necessarily introduce any fundamental differences to the way people made payments but they did accelerate trends that had already become apparent.
Overall, this meant the use of cash declined - but at a markedly greater rate; the use of digital payments grew throughout the lockdowns - but skewed significantly towards transactions where the cardholder and merchant were apart; and, where the cardholder was present, the transaction was invariably contactless and increasingly via a mobile device.
Because of this, ATM activity has been reducing at a huge rate over the last 18 months with volumes down by more than a quarter in 2020 alone. With many merchants discouraging or prohibiting the use of cash, the fact payment card transactions continued to grow through 2020 and are now increasing in double digit territory in 2021 is not a great surprise.