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With the onset of digital wallets, observers of the payments scene might expect consumer demand for cash to wither, and with it the population of ATMs. It turns out the ATM count worldwide did hit its zenith last year, according to research released this week, but the reason is a bit more complicated.
The total number of machines around the world peaked in 2017 at 3.28 million and then started a slow decline that will see it fall to 3.23 million by the end of 2023, according to RBR Research, a London-based firm. And while the reason is related to a downdraft in consumer cash usage, that downdraft is most dramatically going on in one very large country—China.
The installed base in China is expected to drop from 700,000 to 600,000 through 2023, RBR says, for the most part because of wildly successful mobile-payments services like Alipay and WeChat Pay. The two schemes together accounted for $15.5 trillion in spending in that country last year, more than 77 times the $200 billion they racked up only in 2013. Alipay alone saw its user base increase six-fold to 600 million over the same time span.
Since China is home to “by far” the world’s largest installed base of ATMs, according to RBR, that turn to digital cash is having an impact. “China’s burgeoning middle class has embraced digital payments enthusiastically, and as demand for cash falls, the number of ATMs in the country is expected to continue dropping,” RBR says in a news release.
China isn’t the only region where this is happening. RBR also sees it in some of the countries in Western Europe as the spread of payment cards and the ongoing closure of bank branches take their toll on ATM deployments.
Nevertheless, these declines will be more than offset by rising installations in other parts of Asia, as well as in the Middle East, Africa, and Latin America, RBR says. The research firm cites moves in some of these regions toward financial inclusion and a general effort to bring electronic banking to rural areas. Overall, the world total outside of China will grow to 2.7 million machines, up from 2.5 million in 2017, the firm projects.
In the United States, an industry push to modernize the installed base of ATMs will spur deployment and usage, industry sources expect. “With the interest we are seeing in the Consortium for Next-Gen ATMs, growth here is expected to continue,” says David Tente, executive director for the U.S. and the Americas at ATMIA, an industry trade group, in an email message. The ATMIA-sponsored consortium is promoting a blueprint that was reached last year to advance ATM technology.
The upshot is: don’t expect a declining demand for cash access to lead to the end of the ATM any time soon. “Convenient access to cash remains a priority for a great many customers around the world, and ATMs will continue to be a key cash delivery channel in the years to come,” says Rowan Berridge in a statement. Berridge led the research effort for RBR’s report, “Global ATM Market and Forecasts to 2023.”
