ATMs are celebrating their 40th birthday with a midlife crisis, wondering if their usefulness to society is at an end as people increasingly rely on credit cards for everyday transactions, and debit cards for cash back.
The numbers are pretty startling: The total number of machines in the U.S. dropped by 1,000 from 2005 to 2006 (although still at a hefty 395,000). The total number of U.S. ATM transactions dropped in 2006 for the second consecutive year, to 10.1 billion. Monthly transactions per U.S. ATM, at 2,131 in 2006, are barely a third of the level in 1996.
ATMs are expensive for banks, costing up to $50,000 per machine plus annual maintenance costs of at least $12,000. The Seattle Post-Intelligencer thinks the tea leaves spell the obsolescence of ATMs. We are not sold. What do you think? Vote in our poll, after the jump…
Is the ATM growing obsolete? [Seattle P-I]
(Photo: DarthMullet)
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I worked for one of the largest banks in america, and they were consistently opening new atm locations. The above posters were correct, it’s partially due to bank consolidation and also due to banks realizing (not a good thing) that they can just have 3 locations instead of 9 in an area and people will just drive further to one. That keeps them from upkeep on all those machines, and they pass the driving cost on to you. Sometimes it also makes sense for the bank to close down 3 antique ATM’s and open one good one they don’t have to constantly service.
Also…I hardly use the ATM now that more and more places accept the debit card. Although for deposits, because of varying cutoff times and malfunctions with the ATM, I don’t trust just don’t trust it with the transaction.
Whoa…sorry for the stutter in the last sentence!
@mbressman: AGREED. The other thing I hate is how more and more banks will not let you make a deposit at their ATM if you are not a customer of that bank. Wasn’t one of the big selling points when ATMs started appearing everywhere that you could make deposits or get cash at ANY ATM, not just the one at your bank? When I need to deposit a check and both ATMs in town on my credit union’s network are out of service (which has happened!), that does not help me.
Royal Bank in Canada used to have ATMs in some places that allowed you to withdraw $5 bills. It was great at my college because you withdrew anything from the ATM and the last $20 would come out in 5′s. The story goes that the Canadian $5 bill is blue matching the Royal Bank colours. I know the bank across the street from me no longer has an ATM that allows withdrawal of $5 bills so I can only speculate if it’s still available at all.
Personally, I use ATMs for depositing cheques regularly and it’s usually done when the bank itself is closed. Most grocery stores expect a minimum purchase of $5 before getting cash back.
At a lot of ATMs here in Japan, they have a coin dispenser so you can withdraw any amount of money from 1 yen to the maximum, 100,000 yen (though that varies from bank to bank). For deposits, they have a device that automatically counts the money for you (and it works with change too, with no Coinstar-type fees). Also, debit cards and credit cards aren’t in that wide use here, since you can basically carry carry around hundreds of thousands of yen with you at all times and never have to worry about being robbed.
In a former life, I worked as an ATM planner at a bank. Trust me, ATMs are very expensive to own and operate. We used to laugh whenever a C-store owner or other business operator would come in, excited they were getting an ATM, thinking it would boost significantly their income. Even with the fees charged, an ATM is generally a losing proposition. The bank saw them for what they were: advertising (and as expensive as an ATM is, it’s still cheaper than a billboard over the total life of the ATM, and more practical).
@Melov:
Re: Getting the amount of cash back you want, versus what the machine gives. ATMs are finite in the physical amount of currency they can hold. To maximize the amount of cash in one, you put larger bills. If an ATM were truly set up to be able to give “$4.69″, you’d be doing good to get about $12,000 in the unit, stuffed full. At that low of a cash volume, it’d either constantly be empty, or you’d constantly have your replenishment team onsite, adding to the cost of maintenance.
@William C Bonner:
*L* You’ve apparently never worked for a bank. Granted, nationally the pay may be better, but depending on location, tellers won’t make squat. Most banks around here see teller as an entry-level position with no experience, and as such pay minimum wage or a dollar or two above that. A non-seasoned teller making $18,000 is doing well for himself. I will agree that over the course of its life, though, an ATM is cheaper than a teller. Add to that that the ATM can work three eight-hour shifts per day, never takes vacation, sick time, personal time, nor requires benefits, and has fewer offages/cash variances, and it’s definitely cheaper to have than an employee.
I rarely carry cash around anymore. Especially in an urban area, every place takes a debit card, so there’s usually no need for ATMs or cash back, etc.
Of course, the ATMs are still necessary, and I don’t think they’ll be going anywhere soon.
@Pipes: We have ATM’s which work in $10 incrments also! they rock. And the Sheetz free ATM is great also.
I pay various people in cash, as they do cash only business. I need my ATM.
the best ATM i’ve ever used dispensed singles (and larger denominations too). SINGLES! and no, it wasn’t near a strip club.
i’ll need cash until all bars and vending machines (and strippers, apparently) start taking cards… mmm, booze and stale overpriced chips.
I used to be “debit card only” until I, like many americans, wasn’t being careful enough and saying “it’s ok, payday is friday, this won’t hit before then” and when it hit thursday, I was screwed. Now, I go to the ATM, take out a certain amount of cash, and voila! I’m not spending too much because I only use what I have on hand.
As for the teller vs the ATM, I almost always use the ATM that is a walk up attached to my bank. I know it’s just like going up to a teller but without the lines and the person who I really don’t want to deal with.
I rarely use (once/twice a month) use an ATM to withdraw money, but do so a little more often for deposits. My credit union is not very close by so I use a neighboring CU’s machine that is a member of COOP.
If I need cash withdraw, I use the debit card at the grocery store and withdraw from there.
Are the POS terminals considered ATM’s?
Also, why do some stores have ATM machines in their stores when they also have POS terminals? Why would anyone use that ATM and incur the extra charges?
My favorite Chinese restaurant only lets you use plastic for $10 and up, and when I go to concerts I always make sure I have cash. But in all I only go to the ATM a couple times a month. I do have to admit I like BoA’s new ATMs where you can deposit cash/checks before 8 p.m. and the money shows up that night. Unless the cash scanner is broken…which it usually is.
@TheSeeker:
The ATM is just another ‘draw’. A person who needs to use an ATM and knows it is in that store, is more likely to then spend money in the store. There are not always fees involved in using the ATM, such as if it is your bank’s ATM. It’s also handy to be able to get your balance from the ATM, which cannot be done with POS equipment.
@idledebonair:
It’s funny too because they only get charged about $0.35 for a single transaction. I’ve literally told people off. I was at an Ohio state park and they told me the debit card minimum was $65 or I could get charged $2 more for whatever it was I was about to buy. I told the guy to fuck off and that I couldn’t believe a park ran by the state was actually breaking it’s own laws.
@TexasBelle:
Banks ALWAYS have an open fraud line. Banks pretty much never tell you “No, it’s not fraud, you’re paying for it.” They have to prove you made the charge. If you know it’s fraud then you have nothing to worry about. Yes there are rules where you have to report it by a certain amount of days, but almost none of them go by those rules and are very loose on them. You should check your wallet every day. I don’t know how you couldn’t.
@markwm: The mere fact that an atm charges me for getting money out of it is ridiculous if I can’t get the exact amount I want.
I use an ATM once a month usually because I need cash to make quarters for my turn at doing laundry. Otherwise, I never go to the ATM. Not that I really do much spending.
@Melov: The charge generally only happens when you use a machine not in your network. This is because there are several fees in the background that have to be recouped. They are either recouped by charging people who cause the fees to appear (ATM users) or they are disbursed throughout the bank (higher interest on loans, lower interest on savings, etc.)
The ATM is not meant to be a replacement of the bank, but an extension and a matter of convenience. Realistically, to keep the amount of money in it to allow for every conceivable transaction request, especially when on the whole that request will never occur. Honestly, who would go to an ATM and request pennies, nickels, or dimes, or even quarters? However, those items would take up space inside the unit. The option is to go with a bigger unit to accommodate, or to cut down on the available funds in other, more popular denominations. It’s not easy to just say, “We’ll just slap a larger unit in.” Most ATM locations will be space-limited as it is, and often the owner of the space it will occupy balks at the size even one of the smallest units uses. They want to be able to say “we have an ATM” but they don’t want to lose the floor space to it.
I prefer the “chewing gum fee” at a grocery store if there are no free atm’s for my bank around the area. I’d rather spend 40¢ than $2-$3 for $20 to $100 dollars of my own money.
Heck, I remember in the late’80s early ’90s when all bank atm’s were free and usable as long as you were in the right network. My parents used a specific bank account to transfer money to me for college expenses. They’d put in cash in NJ and I’d withdraw with the atm card in AL to deposit in my bank there. Once complete consumer adoption had happened then the fees crept in…