The Decline of ATMs: The Rise of Digital Payments and Coin Shortage

March 16, 2023 By Monica Green

(Image Credit Google)

Image: David Paul Morris | Bloomberg | Getty Images ATMs have become an essential part of modern life. They provide quick and convenient access to cash, allowing people to withdraw money whenever they need it. However, according to a new report by The Wall Street Journal, the number of ATMs in the United States has been on the decline. In fact, the country reportedly lost 18,500 ATMs, with the presence of ATMs peaking in 2019 at 470,000 machines across the country, which has now been reduced to 451,500 units at the end of 2022. The decline in ATMs is likely due to the ongoing covid-19 pandemic. During the height of the pandemic, customers moved to digital payments and credit cards only to never return back to cash. There was that scare that the virus was transmitted by paper, plus the trend of just buying everything online. That dealt almost a death blow to cash, especially for younger people. [caption id="attachment_117791" align="aligncenter" width="1200"] ATM

Photo: iStock[/caption] The rise of contactless credit card payments and money transfer apps like Venmo is another reason for the decline of ATMs. Contactless credit cards allow credit card payments to move away from chips and swipes and towards simple taps that take less time, require less touching, and are reportedly more secure for customers. Venmo, a money transfer app, similarly does not require a physical transfer of funds, resulting in less germ transfer and fewer ATM trips. Venmo reportedly has 90 million U.S.-based accounts and grew 50% in Q2 2022, according to a product report from the company. Venmo has become even more commonplace with businesses as a point-of-sale system or as an official form of payment. It’s also increasingly common among workers who use money transfer apps for tips. A secondary threat to cash payments was the seemingly never-ending coin shortage, which plagued the country shortly after the onset of the covid-19 pandemic. The U.S. Federal Reserve System says that the country has an adequate amount of coins in circulation, but that rate of circulation was disrupted by the pandemic as businesses and banks closed and people stayed home more than usual. Because coin circulation patterns have not fully returned to pre-pandemic levels, caps were reinstated in May 2021. [caption id="attachment_117793" align="alignright" width="1200"] ATM

Image: securityintelligence[/caption] The banking industry says that ATM crime has been playing a huge role in the reduction in ATMs. The ATM Industry Associations’s executive director David Tente told The Wall Street Journal that the increasing disappearance of the country’s ATMs was not entirely due to the rise in digital payments. Tente also reportedly pushed back on the declining figures presented by Euromonitor International, claiming that cash was still important for purchases, albeit in a reduced capacity. “[Cash] is still the payment method of choice for in-person transactions of $25 or less,” Tente said. He added: “Right now, the biggest threat to the industry is not electronic payments but ATM crime.” Also Read: Don't Throw Away Your Old Mouse: 5 Ways to Recycle It While ATMs may be on the decline, they still play an essential role in society. People rely on ATMs to withdraw cash, and they provide a sense of security for those who prefer to use cash for purchases. ATMs are also important for those who do not have access to digital payment methods or for those who are unbanked. However, with the rise of contactless credit card payments, money transfer apps, and the ongoing covid-19 pandemic, the number of ATMs in the United States is likely to continue to decline. The decline in ATMs in the United States is likely due to a combination of factors, including the rise of contactless credit card payments, money transfer apps, the ongoing covid-19 pandemic, and ATM crime. While the decline in ATMs may be concerning, it is important to remember that ATMs still play an essential role in society, and cash is still an important payment method.

By Monica Green

I am specialised in latest tech and tech discoveries.

The Decline of ATMs: The Rise of Digital Payments and Coin Shortage

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