a new study from London-based strategic research and consulting firm RBR, “Global ATM Market and Forecasts to 2018”, predicts the installed base of ATMs across the world is forecast to grow by 44% between 2012 and 2018. This will take the number of ATMs worldwide to 3.7 million by 2018.
Growth will come mainly from Asia‑Pacific and the Middle East and Africa, which will both see increases of over 75% in their installed bases. RBR is also forecasting strong growth in central and eastern Europe and Latin America, albeit not at the exceptional levels being forecast in the first two regions.
ATM’s
It is only in North America and western Europe that ATM market growth remains subdued. This is partly due to the ongoing effects of the financial crisis, which have limited the budgets of many deployers, but also because in these regions, consumers are already well served by ATMs. Many banks have turned their attention from growing their ATM fleets to other aspects of their ATM operations, such as improving functionality and customer service, increasing efficiency and reducing costs.
At a country level, China will account for the largest share of total growth worldwide, driven by a small number of very large banks. Chinese banks are issuing a million new cards every working day, creating unprecedented demand for ATM services. In particular, demand for quick deposit and cash withdrawal is extremely strong, leading to heavy bank investment in ATM infrastructure.
Consumers need ATMs to access their cash
Customer demand for ATMs remains high all around the world, both in mature and developing markets. In more developed regions, ATMs remain popular despite increasing competition from payment cards and alternative payment methods – there are various reasons for this including a preference for cash when making low value payments, personal budgeting, anonymity and segments of the population who mostly operate outside of the traditional banking system.
Not surprisingly, less developed markets have greater cash usage. Interestingly, however, even when people in these markets have debit cards which could be used for payment at the point of sale, they often only use their cards for making cash withdrawals, either because of a lack of EFTPOS terminals in the places where they make most of their payments, or because they simply prefer to pay with cash.
The sizeable unbanked populations in many countries present especially strong potential for new ATM users. Banks see ATMs as a way of attracting people who have not so far been able or willing to access traditional financial services. ATMs can be deployed in a larger number of more convenient locations, while installing an ATM is much cheaper for a bank than opening a branch. Examples of countries where previously unbanked customers are having a particularly notable impact are Bangladesh, India and Nigeria, which are forecast to be the fastest growing markets worldwide, the former two expanding by over 300% by 2018.
While this demand for cash bolsters the business case for deployers to install greater numbers of ATMs, growth in the volume of cash withdrawals is still forecast to outstrip growth in the number of installations. This is not just because of the number of new cardholders entering the banking system, but also because customers are becoming increasingly comfortable with using ATMs, and therefore making withdrawals more frequently.
Overall, global cash withdrawal volumes are predicted to increase by 65% over the forecast period, compared to growth of 44% in the number of ATMs, so as well as expanding their fleets, deployers will also be able to increase the profitability of their existing machines.
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