By : Colin Gordon
December 12, 2017 08:00 AM
Despite the growth of digital alternatives, cash isn't going away any time soon as a payment method. Cash is familiar, simple and ubiquitous, and as such is still relied on by billions of people every day as their primary means of making payments.
Cash 'still a mainstream option'
This was highlighted by Capgemini and BNP Paribas' 2017 World Payments Report. The study noted that cash "continues to be in the mainstream", with it being especially popular for low-value transactions. It added that while cash's share of overall payment volumes is declining in some countries, the amount of cash in circulation (CIC) as a share of GDP has remained stable or increased in most regions. Indeed, only Denmark, the UK, Canada, Sweden and South Africa did not record an increase in the CIC to GDP ratio.
This means that cash will remain a primary payments option for longer than previously anticipated, the Capgemini report continued. It highlighted several reasons for the continued popularity of cash, including a lack of modernized payments infrastructure in some parts of the world, as well as limited access to banking systems in emerging markets. Other key factors included the anonymity of cash transactions compared with other forms of payment. Consumers also have a fundamental right to choose how they wish to pay for goods or services, be it through cash, card, online or digital wallet.
With cash still an important payment option, it will be vital for retail banks to ensure the necessary infrastructure to support this demand is in place. At a time when the branch is tranforming from just being a channel for transactions such as withdrawals and deposits, this means self-service ATM solutions will need to rise in prominence to offer much more.
What this means for the ATM
By 2021, it is expected there will be demand for over 3.7 million ATM installations around the world. And with consumers more tech-savvy than ever, they will expect more functionality and a higher level of experience than they have received in the past. Even in places where demand for cash remains strong, an emphasis on payments choice means that innovation will be required to keep up with demand.
ATM modernization must also reflect these key innovations that are changing the way people manage their finances and make transactions. For example, the 2017 World Payments Report noted that when it comes to non-cash payments, mobile and contactless options were highly popular. Therefore, incorporating this technology into ATMs, with innovations such as contactless terminals and mobile pre-staging, will be highly valuable additions.
Having such functionality helps ensure banks stay at the forefront of the industry and demonstrate they are adapting to the demands of consumers, but they also bring many benefits to customers. For example, the ability to preselect how much cash you want to withdraw via a mobile app before reaching the ATM can be a valuable timesaver. Furthermore, contactless technology doesn't just make the transaction quicker, but also more secure, as it eliminates the need to enter a card into a slot that could be compromised by a skimmer.
In the coming years, the ATM will have to provide access to cash and act as many people's primary physical interaction with a bank. As such, modernizing these devices to ensure they are offering the most up-to-date, innovative customer experience will be essential in an era when cash and digital payments sit side by side.