ATM Industry Trends (and Forecasts)

The future of the ATM industry has been a topic of debate since the possibility of a cashless society appeared on the horizon. So far, that cashless society hasn’t materialized. The ATM market is expected to be worth over $21 million by 2020. And, 80% of consumers still use ATMs as the primary form of interaction with their bank.

So, ATM machines aren’t going anywhere. But, consumers are changing, and they expect more services and a better experience from ATMs. Now, ATMs are improving to meet customer demands for convenience and functionality.

Here are the most important ATM industry trends and forecasts that will take the ATM business into the future.

Updating ATM Machines Is Big Business

90% of ATM machines shipping globally are sent to replace existing ATMs. Older models are being replaced to meet younger users’ expectations of performance and convenience.

New ATMs provide contactless transactions, mobile pre-staging, and financial institution “branch-in-a-box” capabilities. These new ATMs can provide up to 90% of branch-based technology and services. Brighter displays, dynamic branding, video banking, and touchscreens will also become more common in modern ATM machines.

The new features are designed to cater to younger, digital-first generations who expect greater ease of use and digital capabilities from automated services.

Replacing older ATM installations to appeal to a younger user base means more opportunities for ATM owners to install ATMs in prime locations which already have an ATM. ATMs that target the younger generations also indicates that cash will remain king for a long time.

Cash Recycling Is On the Rise

Globally, more banks than ever accept automated deposits from ATM machines. And, an estimated 16% of the world’s ATMs are capable of cash recycling.

Cash recycling, combined with automated deposits, offers an excellent opportunity for ATM owners to reduce their ATM vaulting workload and costs, while providing ATM users with valuable functionality.

Ultimately, this means more potential daily uses, with less cash management.

ATM Personalization and Marketing

Modern ATM hardware offers more opportunities for ATM owners to use software to differentiate their ATM machines from the competition. ATM machines that connect to CRM systems can display personalized messages, and seasonal and location based marketing. This means more possibilities for revenue generating partnerships between businesses and ATM owners.

Improved ATM software also helps ATM machines meet consumer demands for a seamless transition between mobile and physical channels.

These improvements bring ATM machines closer to functioning as complete, automated bank branches.

Smart ATMs are Coming

2019 could see smart ATM machines become a mainstay in the ATM market. Smart ATMs can offer:

Multi-currency cash dispensing.
Loan repayment.
Bill pay.
Ticket dispensing.
Account opening.

Not all smart ATMs are capable of providing all of these services. But, smart ATMs will give banks new incentives to work with third-party ATM owners. These partnerships would help banks reduce costs and offer more convenience to customers. And, more opportunities to provide ATM machines to financial institutions will be a boon for ATM owners.

But, smart ATMs won’t replace standard cash-dispensing ATMs. Cash-dispensing ATM machines are the best option for high-traffic and temporary ATM locations, where banking services are unnecessary.

New ATM Designs Will Open Up Opportunities for ATM Owners

Solar ATM machines are fairly uncommon, right now. But wireless ATM devices are now available, these new designs enable ATM owners to place ATMs in previously inaccessible locations or provide a more reliable ATM solution for remote and temporary ATMs.

Additionally, solar ATMs may offer ATM owners more pitch angles for persuading location owners to accept an ATM, since solar technology is popular with environmentally conscious customers.

ATM machines with larger screens will also become more popular as ATMs offer additional functionality.

Overall, ATM machines are getting better. And, they can provide more value to businesses. That means more business for ATM owners.

ATM Security Will Continue to Improve

EMV will continue to expand in the ATM industry. And, other security features, such as cardless ATM transactions, will become more common. Security features that add security and increase convenience will be in high demand, once the service has proven itself secure.

However, new security measures are not predicted to have any significant effect on current ATM models. The adoption of new security measures depends on consumer acceptance. Most ATM users know and trust the current batch of ATM security protocols. So, customer adoption of new security features will be slow.

Managed Services Is the Fastest Growing Segment of the ATM Market

The managed services segment of the ATM market is expected to grow 9.6% between 2015 and 2020. Businesses that have traditionally owned their own ATM machines are outsourcing their ATMs, and paying for ATMs as a managed service.

This is great news for independent ATM owners, because it means that there are more opportunities for ATM owners to partner with banks and provide off-site ATM locations.

Yes, there are alternatives to cash purchases and ATM machines. But, people still prefer cash for everyday, low-value purchases.

Although cashless options are valuable, financial institutions aren’t working toward a completely cashless society. The goal is to provide the best cash and cashless options. That way customers can access their accounts when and how they want. This means that ATM machines will remain a staple in the purchasing and banking cycles.

In fact, it’s most likely that ATMs will play a greater role in the future as ATMs adapt to provide a more seamless interface between the digital and physical economic spaces.

What are the Right and Wrong Ways to Dispose of an ATM You No Longer Need?

Automatic teller machines, by and large, have a lifespan lasting between seven and ten years. Not due to them wearing out but due to technological advances and new laws requiring ATM upgrades.

If you’ve just purchased a new ATM for your place of business due to the voice guidance text to speech ADA guidelines, and you want to get rid of (decommission) an old, obsolete ATM, you have to think carefully about how to do so. It’s a really bad idea to just take it to the town dump.

For one thing, the various electronic parts of an ATM make it hazardous to the environment. Another problem is that thieves and hackers who come across a thrown-away ATM could bring it home, or even just bring parts of it home, may figure out what information is on it, how to use it to harm you, or even how the various security systems work.

This could lead to discovery of new methods for harming your business, or breaking into these machines to steal passwords and customer account information. This is a practice known as “reverse engineering.” The idea that criminals would do such a thing is not mere speculation, either. Some would-be thieves have already been apprehended in junkyards trying to do so. As a business owner, you could be found liable in court if you were to discard an ATM improperly and as a result your customers’ accounts were compromised.

The ATM Industry Association – an influential international trade group that was founded in 1997 and includes more than 1300 members – considers the problem of discarded ATMs to be so serious that it created a detailed guide on how to throw these machines away. Called “Best Practices for Decommissioning ATMs,” this white paper was issued in early 2011 and is available to ATMIA members.

When it comes to the best practices for decommissioning ATMs, discarded ATM’s are an especially ripe target for crooks. The Encrypted PIN Pad (EPP) is the most vulnerable. The EPP is the piece of technology that encrypts – encodes so as to disguise – customers’ personal identification numbers as they use ATM’s. Hackers want to get their hands on EPPs, learn how they work, and find out what their vulnerabilities are. Therefore, ATM owners should disable, or even better, completely destroy an EPP before getting rid of an ATM.

What Can I Do with My Old ATM?

The best measure of all to take, is to call a professional ATM scrap business to throw away your ATM for you. This way, you can be positive that your old EPP is of no value to hackers. In addition, the discarding professionals will make sure that all environmental laws are followed throughout the entire process. For instance, they’ll know how to properly remove and separate the ATM’s metal parts, plastic parts and cables so that each group may be recycled properly.

If you run a small place of business, you might find that the cost of ATM disposal is something of a burden. You can alleviate the cost, however, by trading in your old ATM. Many ATM vendors, both physical stores and online sellers, offer money for used ATMs, or for certain parts of used ATMs. Note that you’ll have a much easier time trading in your used ATM if the machine is five years old or younger. If your ATM becomes obsolete, it will be difficult to trade in. Further, no matter how reputable the enterprise that’s taking your ATM, always destroy the ATM’s PIN pad and hard drive (if any) before turning it over.

It’s also wise to try to negotiate a free disposal before you purchase a new ATM. That is, whenever you’re shopping for a new automatic teller machine, ask the vendors you’re considering buying an ATM from if they’d be willing to take away your old ATM, free of charge, when you’re finished with it. If acceptable, have them include that promise in writing.

To be safe, simply remove all electronic components such as the mother board, memory, processing chips, keypad and other electronic components. Once the keypad and electronic components are properly destroyed the steel enclosure can be recycled by a scrap metal yard.

Finally, ATMs that are no longer in use, that you’re planning to throw away at some point, should be guarded just as securely as ATMs in active use. Be sure to remove the keypad and any storage device such as the motherboard to include the memory and processing chip before simply putting it in the back room or out near a dumpster. When in doubt, contact your local professional recycling company.

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