The concept of a cash-free (or cashless) society has been around for decades. But with the digital-payments penetration reaching 89 percent in 2022, and with the share of respondents who report using two or more forms of digital payments growing rapidly - from 51 percent in 2021 to 62 percent (McKinsey), research shows us that customers are increasingly moving away from cash-based payments.
This transition to a cash-free society means there is an ever expanding universe of digital transactions that the financial services industry needs to handle.
In order to handle this growth and resultant complexity, financial organizations must do more than ever before, including implementing more robust testing processes, to ensure their products and services can not only cope with the volume of transactions, but continue to meet the ever changing requirements of sophisticated and sometimes fickle consumers.
While a cash-free world will impact all payments industry participants, there can be little doubt that ATM fleet owners have the most at risk. In this blog we take a look at some key facts and stats regarding the use of cash and what this means for the ATM channel.
The Trend Towards a Cash-Free Society
While cash will likely remain around for a long time, there’s no doubt that with each passing year the world becomes less reliant on cash and moves increasingly towards digital payments. It’s certainly possible that some markets will be totally cashless (no paper currency and no coins) within the next several years.
Here are a few key statistics to show how the world of payments are changing:
16 percent of consumers have stopped using cash, and 53 percent say they will do so within a decade (Visa).
60 percent of people said they make just a few or no purchases with cash, double the number from 5 years ago. Just 13 percent said that they make all or most of their purchases with cash - a number that has been slashed in half from the reported 28 percent five years ago (Gallup).
Nearly nine in ten Americans are now using some form of digital payments, and they are engaging with these rapidly evolving solutions in an increasing variety of ways (McKinsey).
This trend towards a “cash-free” world is expected to only continue to increase, as contactless methods of payment become easier and more seamless for the consumer.
How Are Cash-Free Payments Affecting the ATM Channel?
The reality is that the ATM channel is under continuous pressure in the modern world, as many people are taking out less cash and using other payment alternatives to make purchases.
Not only that, but we also see ongoing digital transformation efforts allocating more budget money to newer, more trendy areas of investment, such as artificial intelligence.
Yet the cash-free world doesn’t mean ATMs will become redundant. They will remain a vital delivery channel for a growing range of products and services, such as:
Account and bank transfers
Foreign currency exchange
In addition to these traditional service offerings, we could also expect to see ATMs offer a range of new services, including digital wallet and cryptocurrency transactions, as well as many others.
How Will a Cash-Free World Impact ATM Testing?
As the ATM channel becomes increasingly threatened, quality, efficiency, and perfect execution on every single consumer transaction will become even more important.
Using modern and efficient testing methods, ATM deployers can continue to invest in the channel and make continuous improvements that enhance the customer experience, as well as brand loyalty.