Page 63

T

he ways we pay for things has been changing more in the past 15 years than in the previous 200 years. Every new innovation we see, right from the days of credit card, is taking some share away from cash. Looking at this, one might think that cash is fast losing its relevance and so are ATM manufacturers. After all, technology news nowadays is dominated by ApplePay, Samsung Wallet, Google Wallet, etc. More companies are entering the fray to grab a piece of the action. To add to this, some nations, like Denmark and Netherlands, are moving towards being a cashless society. Despite this, cash has managed to remain a vital part of everyday transactions. It still remains the most commonly used mode of payment. Data by Retail Banking Research (RBR) states that annual cash withdrawal vol-

umes worldwide will grow by an average of 7.9% per year between 2013 and 2019 — well ahead of GDP growth rates of countries over the same period. “The cashless society has been predicted since the credit card was invented in New York in the 1950s but plastic failed completely to stop the popularity of, and growth in demand for, cash. Now plastic could be displaced by mobile phones initiating transactions instead of cards. Part of this is the popularity of cash as a store of value (like gold). Hence, one cannot discount the fact that cash is the global payment method of choice, still accounting for at least 8 of every 10 payment transactions,” says Michael Lee, CEO, ATMIA, an independent, non-profit trade association, which aims to promote ATMs. Further, a report by RBR states that ATM cash withdrawals worldwide is expected to be 94 billion this

year compared to 62 billion in 2009. Even today, amidst talk of a cashless society, consumers globally make up over 90% of the total volume of transactions and use cash as the payment method in roughly 85% of those transactions, according to a research by RBR. “Cash continues to play a key role in small transactions. Cash in circulation in the US has grown 50% during the last 10 years, according to the Federal Reserve Bank in San Francisco. In Europe, it’s 80% higher in the past 10 years (European Central Bank),” says Andy Mattes, CEO, Diebold, a US-based manufacturer of ATMs. What ATM manufacturers are doing Larger Independent ATM Deployers (IADs) have been purchasing smaller entities to acquire a bigger share of the market. The players are also going for an image overhaul — most of them want to change the common

61

Cash continues to play a key role in small transactions. Cash in circulation in the US has grown 50% during the last 10 years, according to the Federal Reserve Bank in San Francisco. In Europe, it’s 80% higher in the past 10 years (European Central Bank) Andy Mattes, CEO, Diebold, a US-based manufacturer of ATMs

Jul - Sep 2015 International Finance Magazine

Profile for International Finance

International Finance Magazine Jul - Sep 2015  

Special Focus: Payment Systems

International Finance Magazine Jul - Sep 2015  

Special Focus: Payment Systems