The State Of ATM And Cash-www.tigeratmparts.com

The State Of ATM and Cash

2020-11-27

Do I need an ATM and Is Cash still King?

When Bank of America launched the first widely successful credit card in the late 1950s, rumors of the death of cash began swirling; to some, the credit card marked the first steps towards a cashless society. 60 years later, cash is still in circulation despite growing competing from credit cards and other payment forms. This begs the questions: What is the state of cash? and What does this mean for my ATM?

THE STATE OF CASH
In November of 2016, the Federal Reserve Bank of San Francisco released a report on preferred payment methods. The results of the report indicate that:

Cash remains the preferred method of payment
With more consumers carrying credit and debit cards, the competition to be the first pulled from a wallet is increasing. The study shows that the top three preferred methods of payment are cash (32%), debit (27%), and credit (21%). Cash, down from 40% usage in 2012, is still the dominant form of payment.

There are a couple factors attributed to the decline in cash usage: Consumers are making more online purchases, and new payment forms like Apple Pay, Venmo, and PayPal are growing. Online retailers like Amazon and Alibaba don’t operate off an exchange of physical cash, contributing to the rise of card payments and PayPal. Meanwhile, payments via Apply Pay are increasing, albeit at a significantly slower pace than all other forms, clocking in at 11% of all reported transactions.

Cash is the preferred payment method for small value transactions
Consumers used cash in 60% of transactions totaling $10 and under. For transactions between $10 and $25, consumers preferred cash in 42% of transactions. Consumers reported this is more out of convenience than merchant preference. This means that minimum purchase requirements don’t necessarily dictate whether a consumer will swipe their card or not.

Cash dominates most merchant categories
Cash was the preferred payment instrument when it came to food purchases, auto related purchases, and entertainment. In those categories, cash transactions totaled 39%, debit cards in an average of 26% of transactions. Credit cards were reportedly used in an average of 21% of transactions.

WHAT DOES THIS MEAN FOR YOUR ATM?
One thing ATM owners and operators want to make sure of is that their investment is a sound one: that cash doesn’t go extinct, rendering their machines useless.

The findings above should quell any worries; cash has a strong foothold amongst the consumer. Because people are reluctant to charge small value transactions, having cash available accommodates your customers. However, the report also shows the rise of more conscious, connected consumer.

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