For today’s consumer, ATM use largely focuses on accessing cash, and that access is still important in the COVID-19 era, according to new MetaBank® research. There’s also an opportunity to reimagine a key industry mainstay — the ATM — as a technologically advanced, interactive teller machine focused on self-service.
These are among the key insights identified in MetaBank’s research on the ATM industry landscape, which was announced today. MetaBank, N.A. (“Meta”), is a national bank, a subsidiary of Meta Financial Group, Inc.® (Nasdaq: CASH) and a leader in providing innovative financial solutions to consumers and businesses throughout the country.
“The ways consumers want and need to access cash and other banking services are evolving, in part due to the COVID-19 pandemic,” said Sheree Thornsberry, Meta EVP and Head of Payments. “This presents a tremendous opportunity for financial institutions and Independent ATM Deployers to reimagine the way they work together and the future of the industry itself, as our research showed consumers are increasingly interested in options that allow for self-service.”
In August 2020, Meta surveyed more than 1,200 U.S. adults to examine their post-pandemic sentiments about ATM and cash usage. Then, Meta paired that with a pre-pandemic analysis of the ATM industry aggregated by Mastercard from a number of expert sources, including Federal Reserve System, ATM Industry Association, Bankers Equipment Service, RBR Global, Star Financial Services, Transaction Network Services, Wall Street Journal and more. Key trends identified from this research include:
- Cash is still being used, even in a COVID-19 world. From March to June 2020, the peak of stay-at-home orders in many places nationwide, more than half of Americans (55%) withdrew cash from an ATM. In fact, Americans withdrew cash during this time a lot — 44% withdrew cash more than once, and 7% even did so more than ten times. Why? For everything from day-to-day purchases (11%) and small expenses (11%) to peer-to-peer transactions (8%). Further, nearly one in five (19%) value having cash more now than they did before the pandemic, and 59% say it has not changed their position on the use of cash.
- ATMs are primarily used to obtain cash — and there’s an opportunity to leverage this industry mainstay for more. Despite advancements that have given ATMs more functionality than ever, 60% only use them for the purpose of cash withdrawals. But, because of high operational costs, banks are shuttering branches at a record rate. This will likely be accelerated by COVID-19, as 24% say they’re less likely to visit a bank branch due to the pandemic.1 In a post-COVID world, self service will be key. ATMs can help to fill this need, and the Meta research showed consumers have an appetite for this shift — 43% of Americans are interested in completing banking activities like cashing checks, making deposits and withdrawals or video conferencing with a remote teller at an ATM instead of having to physically go into a bank branch.
- Rising costs will also trigger an increase in Independent ATM Deployer (“IAD”)-managed ATMs. Over half of all ATMs are currently deployed by Independent ATM Deployers (“IADs”). In the coming years, this percentage is expected to increase. The operational costs of managing a fleet of ATMs have been and continue to be very high, causing financial institutions to outsource a number of their ATM operations to IADs. Some financial institutions are selling, outsourcing ATM operations or creating branding agreements with IADs. Branding agreements allow banks to maintain their presence and customer loyalty without the costs associated with growing a fleet of ATMs.
Through its ATM sponsorship services, Meta supports hundreds of thousands of ATMs nationwide with access to national and regional debit networks. Meta balances innovation and oversight, fostering collaborative partnerships with industry leading IADs, processors and networks, and has the largest ATM footprint in the country.
1PWC, “Many consumers think their banks are doing a good job. In a COVID-19 world, will that be good enough?” https://www.pwc.com/us/en/industries/banking-capital-markets/library/consumer-banking-survey.html