With cash becoming an increasingly rare sight, increasingly people and businesses are turning to automated teller machines (ATMs) for their financial needs. With the global ATM industry forecast to reach over US$10.64 billion by 2026, understanding the drivers that are fueling the growth of this sector is essential. In this article, we’ll take a look at the factors that are driving growth in the ATM industry.
What is ATM Industry?
The ATM industry is a global market that covers banking machines such as automated teller machines (ATMs), cash dispensers, debit card systems, online banking, and various other related products. These machines are mainly used in the retail banking business. The global ATM industry is expected to reach $67 billion by 2024, with an estimated annual growth rate of 8.5%.
ATM industry offers an array of services, from cash withdrawal to online bookings for services such as flights, hotels, and restaurants. ATM deployments are becoming increasingly sophisticated, powered by emerging technologies such as biometric authentication, artificial intelligence, and blockchain, that help shift the industry to the fourth Industrial Revolution.
Drivers of ATM Industry
One of the major drivers of the ATM industry is increasing global urbanization. The rapid growth of urbanization in emerging and developed countries is likely to demand a range of electronic payments and other services, as there is an increasing demand for liquid assets, including cash to provide consumers with convenience.
Furthermore, increasing financial inclusion initiatives are projected to supplement the growth of the ATM industry. For instance, the India government’s initiative to provide free banking services and to ensure ease of access to banking services has enabled India to become the world’s fifth-largest ATM market.
The rise in technology-enabled ATM interfaces is also expected to contribute to the growth of the industry. For instance, many banks are deploying advance ATMs that allow users to easily access their account information with touchscreen displays and receipt printing. Additionally, the use of biometric features for authentication is expected to become common in ATMs in the near future, creating new opportunities for the industry.
ATM Industry in the Future
As advanced security features such as biometric authentication and blockchain technology become available to banks and other financial institutions, then these more secure ATMs are expected to replace the traditional cash-dispensing machines over the coming years. This will help to reduce the risk of ATM fraud and robbery and improve customer safety.
Furthermore, with many financial institutions incorporating the concept of open banking, there is an increasing need for compatibility between services. As a result, an increase in ATM service providers and operators is expected to ensure that these ATMs are effectively integrated into current banking systems.
Moreover, as virtual currency and mobile payments are becoming common, the ATM industry is expected to grow, with virtual ATMs becoming increasingly available. Such ATMs not only provide users with access to digital banking services but also allow them to perform transactions directly, denying the need for a third-party intermediary.
It is clear that the development of the ATM industry is accelerating rapidly in the coming years. The growth of global urbanization and financial inclusion initiatives, advancements in technology, and rising use of virtual currency and mobile payments are expected to drive the industry growth and reshape the ATMS industry in the near future.