ATM Trends Show Shifting Attitudes Toward Cashless Payment
2019-05-31 17:23 Friday
According to an American news report, the number of ATMs worldwide is down for the first time ever. As noted by the consulting firm RBR, the number of ATM machines declined by 1% last year in four of the world's five largest markets; China, the U.S., Japan, and Brazil. The reason for the decline in ATM machines may seem obvious to those living and/or working in China for the last several years, a culture where mobile payments are preferred. But in other parts of the world where mobile payment has had a slower start, consumers are now beginning to see the obvious benefits of making payments using and E-wallet or digital currency.
Apple Pay, introduced in 2014, has had some success with statistics showing 127 million users worldwide as of October 2018. By comparison, China's WeChat Wallet and digital payment system was being used by an astounding 900 million people at the same period of time. If you're reading this from outside China, there's a possibility that you may have not even heard of the social media app WeChat. But here in China, one would not be surprised by seeing a farmer selling produce on the street who accepted payment by flashing his QR code which you scan with your smartphone to instantly send him payment via WeChat. It's quite remarkable. But in China, these otherwise remarkably modern features of efficiency are the normal way of life.
Now, payment platforms or mobile payment services outside of China, like Venmo and Cash App, are following the trends established by companies like WeChat and are becoming the new normal worldwide. "It saves me a step from having to go to the ATM, pull out the money, meet up with someone and then give them the money," one consumer noted. "I use it probably once or twice a month now just to give friends money or pay someone back for something," he said. According to E-Marketer, by the end of the forecasting period in 2022, over half (52.5%) of mobile phone users will have made at least one P2P transaction in the past month.
Banks are also taking notice of those changes and trends. More than 30 of the largest banks in the country, including J.P. Morgan Chase and Wells Fargo are now backing Zelle, a peer-to-peer digital wallet payment service which is built directly into a bank's mobile apps. "You know, with anything you don't want to miss part of the market. So, if some part of your target market is using these services, then as a large bank you'd want to offer them," says Alex Hamerstone, Practice Lead for Governance, Risk Management, and Compliance at information security consulting team TrustedSec.
ATMs are expected to drop another 0.6% in the next six years, according to RBR, with growth in developing markets helping to slow the decline. But, with the shift towards cashless payments, banks still aren't ready to give up on traditional payment infrastructures and are now making upgrades to ATMs to take advantage of these new technological developments. In fact, in the very near future you may not need to carry your ATM card with you at all, so long as your bank's ATM and your smartphone are equipped with near field communication technology (NFC).
NFC is a method that detects and enables technology to communicate and transfer data wirelessly. It is estimated that by 2020, over 2.2 billion smartphones will be equipped with NFC. Banks have understood significance of mobile banking and are implementing NFC in thousands of ATMs. Wells Fargo has already established 13,000 card-less ATM locations this year alone, and JPMorgan Chase is also testing card-less ATMs in more than 600 locations and plans to roll them out broadly next year. Just in recent weeks, Wells Fargo, J.P. Morgan Chase and Bank of America announced their plans for Smart ATMs.
With this surge in cashless payment options, including how Blockchain technology and cryptocurrencies are being used to facilitate overseas payment and cross-border payments, it's no surprise to see traditional banking systems such as ATMs getting a modern-day smart upgrade.
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Key Words: Mobile Payment, Digital Payment, E-Wallet, Aggregate Payment, FinTech, QR Code, Cross-Border Payment, Overseas Payment, E-Commerce, Artificial Intelligence, Payment Platform, Payment Security, Payment Infrastructure, Cashless Payment, Digital Wallet, Cryptocurrency, Digital Currency, Blockchain