The ATM, though still being used, are as representative of a bygone age as On the Buses. While their introduction ushered in a new era in retail banking, it is now time we accepted that cash has had its day. And in a cashless society we will not need ATMs any more, writes Sophie Guibaud, vice-president of European expansion at Fidor
The first ATM was opened by Barclays in Enfield, UK, 50 years ago. Reg Varney, the celebrity selected to publicise the event, seems like a very fitting choice in retrospect.
On the Buses, the TV show he starred in, has not aged well, even though it is still repeated on some channels well down the list on our electronic programming guides.
While the UK has made great strides in going cashless, with the acceptance of contactless payments on the rise and card payments now more common than cash ones, there is still some way to go. Other countries – look at the Scandinavian nations and China, for example – are leading the way and showing us just how good the future could be.
And that is the reason we should all be pushing for a cashless society: Quite simply, it will make all of our lives better.
The benefits for the general public of going cashless are many. Firstly, we do not have to deal with the inconvenience of it – trying to find some coins for a parking meter or toll booth, loose change jangling in our pockets, wads of notes bulking up our wallets. Secondly, it is more secure from our point of view – if we have cash stolen from us, there is no way to prove that we ever had those notes and coins in our possession.
Most importantly from a consumer point of view, though, digital transactions offer the opportunity to get so much more value out of every purchase. With every payment recorded it is much easier to track spending, and set and stick to budgets. It also enables merchants and banks to create better targeted offers and discounts for you, based on your purchasing behaviour – as long as you are willing for your data to be used in this way, of course.
For banks, cash is problematic. It needs to be stored, it needs to be counted, it needs to be secured, it needs to be insured. Similarly, merchants big and small need to do all of these things as well. Compared to a digital alternative, all of this comes at a high cost. So as far as the banks and merchants are concerned, going cashless is a no-brainer.
And there are problems for society as a whole that we could begin to overcome if physical cash were to be wiped out. With a blockchain-based system, where all money can be traced to its rightful owner, money laundering would theoretically become impossible. Getting rid of cash would certainly help in the fight against crime.
Of course, there are some headaches that need to be overcome before we can get to this point. One of the biggest reasons that Scandinavia and China have been able to make so much progress towards a totally cashless society is that they have solid systems that enable peer-to-peer payments. In Scandinavia, for example, you have platforms such as Swish and mCASH, while in China it is Alipay and WeChat that are driving this.
Another issue is the small retail businesses and merchants that still see the bulk of their transactions made in cash. This is often because the card payment systems on premises – if they even have them – are old and slow, with many customers choosing to use cash for the sake of a few seconds, rather than using a card or their smartphone.
So what is required is wide access to low-cost, functional point-of-sale systems for all retailers, which will have the added bonus of giving these small shopkeepers the ability to reward regular customers with discounts and offers – something that has to date been the preserve of larger retail chains.
Looking back over the past 50 years, it has become clear that it is not the ATM that is at risk of becoming obsolete but rather the physical bank branch. The integration of innovative software, new operating systems and technology into ATMs have now evolved these simple cash dispensers into fully capable banking services.
Consumers can manage all their virtual banking operations directly from ATMs – from speaking with tellers through video, banking in cheques and opening accounts – without ever having the need to visit their physical bank.
With over 3m of these machines deployed in all different parts of the world, and the continued upgrade of the services they can provide, and the low cost of implementation, the ATM is evolving into being a one-stop virtual bank, and could slowly replace existing bank branches.