The Disappearing Atm: Uncovering The True Cost Of Convenience

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Although multiple factors have contributed to the decrease in public ATMs throughout Australia, including large and small banking operations, we commonly only hear of one: people simply aren’t using them anymore.

With the massive influx of digital payment systems – like contactless cards and smartphone EFTPOS – customers are now more likely than ever to forgo ATMs in favor of swift, convenient transactions. It has resulted in a significant drop in ATM use across the nation.

According to the Reserve Bank of Australia, in November 2019, ATM withdrawals decreased dramatically by a whopping 5.8%. This statistic reflects an overall downward trend for cash withdrawals over the past twelve months.

But there’s much more to it than that.

With digital and contactless payments on the rise, cash transactions are quickly becoming a thing of the past. It has created an issue for retailers with ‘no refund on sale item’ signs – they no longer need to use these costly resources, as customers don’t carry enough physical money. It can be great news for banks regarding their bottom line.

Compared to other services and products banks offer, Automated Teller Machines (ATMs) do not typically generate large amounts of profit.

“Free-to-use ATMs are a major cost to the banking sector, and it’s getting worse,” said an industry body.

Automatic Teller Machines (ATMs) offered valuable services to customers and were once a critical factor in why people chose a particular bank.

As customers increasingly use them less, ATMs have become a financial burden for the bank. Their diminishing use has become an unnecessary expense on the bank’s bottom line.

“It takes plenty of resources and effort to maintain ATMs, which in turn cuts into profits for the bank,” said an industry body.

Consider the substantial costs associated with operating an ATM: from purchasing and stocking it to paying for protection services and insurance. For those ATMs not located on bank property, there’s always rent – a significant expense. The cost can be overwhelming when you really break down each item necessary for these machines to run smoothly.

This is why private ATM companies are becoming increasingly popular over the traditional big banks – they supply cash readily available and cover their overhead costs with a nominal withdrawal fee. Plus, unlike most of these large lenders usually don’t require one.

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