Are Digital Payments Killing ATMs? Some Researchers Say Yes, But the Debate Isn’t Closed

A report that emerged over the weekend showing a first-ever drop in the ATM count in four of the five largest ATM markets has lent new urgency to the debate over whether electronic payment methods are killing cash—and hence cash dispensers.

The report, from London-based RBR, says the number of machines in Brazil, China, India, Japan, and the United States fell nearly 6% in 2018 to 1.62 million. More than half of ATMs globally are installed in these five countries, research firm RBR says. Only India showed an increase last year, albeit growth has slowed even there.

That was enough to depress the worldwide total from 3.24 million in 2017 to 3.22 million at the end of last year, according to RBR’s report, “Global ATM Market and Forecasts to 2024.”

While weaker demand for cash may be part of the cause, RBR says reasons vary by country. “In China, the swift adoption of non-cash payments has contributed to a similarly rapid fall in ATM installations. Branch closures have led to fewer bank ATMs in the USA, while IAD expansion was stifled as some retailers chose to withdraw machines rather than upgrade to EMV standards,” the company says in a press release about its report. IADs are independent ATM deployers, which install and manage machines mostly in retail locations.

In Brazil last year, the story was similar to the one in China, according to RBR. “[T]he removal of around 1,200 terminals in Brazil was primarily due to banks reacting to a surge in the use of digital channels,” the company says.

Cardtronics plc, one of the largest ATM deployers, reported earlier this month its company-owned installed base across its markets in North America, Europe, Africa, New Zealand, and Australia dropped 8% last year, to 74,586. In North America alone, the number of transacting ATMs fell 8% in 2018. The count of merchant-owned machines also slipped globally, from 15,166 to 13,749, Cardtronics reported. However, at least some of this drop is explained by the decision by 7-Eleven Inc. to move its machines to a different operator.

But while RBR is reporting a first-ever shrinkage in the installed base last year in these five major markets, not all expert observers agree, at least when it comes to the United States. “I can’t comment on the other markets in the top [five], but we’re not seeing any decline in the U.S. from last year,” says David Tente, executive director for the U.S. and the Americas at the ATM Industry Association, in an email message. “The last decline we saw was back around 2006/2007—but we’ve more than made up for that.” He argues, indeed, that the U.S. machine count remains steady. “[The] current population [is] still pegged at between 475,000 and 500,000,” he adds. “I don’t think that branch closures have hurt [the financial-institution] ATM population much at all.”

As for whether digital payments have the potential to erode the installed base of ATMs, Tente takes exception to that idea as well. E-payments are having an effect, he says, but not much on ATMs. “We see Zelle, Apple Pay, and the others having some impact on cash, but mostly taking from checks and other forms of electronic payment,” he argues.