ATM Market - Half A Century Of Assisting People

Posted On Oct, 14, 2019

An ATM, short for Automated Teller Machine, is an electronic telecommunications setup aimed to assist financial institution customers in performing financial transactions such as deposits and withdrawal, account information and transfer of funds, without the physical involvement of bank staff. It has different terminologies in different countries, such as automated banking machine (ABM) in Canada, while the British variants include cashpoint, cash machine and hole in the wall.

Since their official launch in 1969, the definition has changed from a mere cash withdrawing machine to an automated machine with multiple functionalities. They have undergone changes according to the needs of the market, as competitors try to outmuscle each other with introduction of new and improved features. The global demand for them is poised to grow on account of technological advancements in wireless communicating device integration.

Introduction of technologies such as Bitcoin ATMs, which have found a rapidly growing audience; Digital Toppers, which allow operators to offer customers with more interactive experiences; and integration of AI, which helps machines perform at an optimal level at all times, has enabled in further growth of the global market. Leading banks are integrating their services with technology companies in order to deliver a seamless consumer experience. The global ATM market is an attractive one, owing to the following factors:

  • Geographical mapping coupled with GPS has increased the ease of identifying potential areas for kiosk installation, which in turn has increased global demand.

  • Competitive rivalry among private sector banks to increase market penetration leads to expanding existing number of kiosks which in turn will augment growth. Moreover, with the entry of many other non-banking companies in the global industry, the industry is bound to grow over the forecast period.

  • Additionally, growing consumer awareness regarding various services through kiosks coupled with constant technology up-gradation by companies is expected fuel market growth.

  • Government policies of financial inclusions and ensuring bank account for entire population would further add to growth of the market.

  • The thriving tourism industry also plays a big role in assisting market growth, with foreign tourists able to exchange currency through the Dynamic Currency Conversion (DCC) feature.

Even with the various features and functionalities that are provided by Automated Teller Machines, there are still some teething issues that can potentially hold back the market growth.

  • Primary among the issues is the rise of digital payments, with almost every developed and developing country using this feature for convenient payment. Moreover, Governments are attempting to convert economies to cashless ones, with developing economies such as India and China backing digital payment companies to the fullest.

  • There is also the issue of online fraud, which creates doubts in the minds of customers, leading to avoidance of ATM usage. This factor also hampers market growth.

  •  In the underdeveloped and developing regions, there are recurring issues regarding connectivity, which again is a restraining factor.

  • Unavailability of cash, or availability of only certain denominations, as well as out of order ATMs also are a challenge to the market growth.

The industry is segmented on the basis of application including on-site and off-site installations. Those deployed within the premises of a bank are termed as onsite, whereas the machines deployed outside the premises are termed as off-site ATMs. On site ones are further segmented into work site ATMs meant solely for the use by bank officials. Mobile Automated Teller Machines provide money-on-the-wheels service, ensuring that many areas can be covered for financial transactions.

The market is segmented on the basis of end-use as yellow label ATM for e-commerce transactions, pink label aimed at for women bankers, orange label for share transactions, green label for agricultural transactions, brown label for third-party operations, and white label which includes services provided by non-banking financial institutions.

Asia Pacific is expected to be a fast mover in the market, with the rapidly developing economies of India and China spearheading market growth. However, presence of digital payments has been a major roadblock for growth of the market. Every kind of economy, whether developed or developing, is fast moving towards digital transactions. Smartphone penetration has been rapidly growing, showing no signs of stopping, which furthers the cause of digital transactions. Automated Teller Machines globally are witnessing a marginal decline, whether due to online alternatives, or branch closures.

Competition in the global market is strong, with presence of major players such as:

  • NCR Corporation

  • Diebold Nixdorf, and

  • Nautilus Hyosung

along with a number of others such as:

  • Euronet Worldwide

  • Fujitsu

  • Trinton Systems of Delaware LLC

  • HESS Terminal Solutions GmbH & Co.

  • Hitachi-Omron Terminal Solutions Corporation, and

  • GRG Banking

The market leaders are involved in a tough battle to gain a larger slice of market share, with intensive research and development, as well as focus on multi-function devices becoming the norm. Some of the recent developments to have taken place are:

  • In September 2019, the National Bank of Bahrain (NBB) announced that it was deploying SelfServ 80 ATMs from the NCR Corporation. The latter would also be providing the NBB with the NCR Direct Connection (NDC) Enterprise software to assist NBB in delivering a consistent consumer experience across physical and digital channels.

  • In June 2019, Diebold Nixdorf introduced a series of self-service solutions, called the DN Series™, with major brands in banking such as Fifth Third Bank and BNL Gruppo BNP Paribas among the 18 financial institutions piloting the DN Series in 13 countries. Through this, the customers are expected to have a personalized, modern experience.

In February 2019, CaixaBank, a Spanish financial service company, deployed technologies by FacePhi and Fujitsu to introduce facial recognition Automated Teller Machines, with 4 branches in Barcelona doing the honors of unveiling the technology. Customers using the ATM would be able to choose between PIN identification and fac

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