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The Value of Cash and ATMs

Thursday, August 13, 2020

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Company: Paramount Management Group

ATMs do not just dispense cash; they dispense value way beyond that of the banknotes they
distribute. These machines play a pivotal role in disaster recovery, poverty alleviation and social
protection. ATMs are the unsung heroes of certain social classes and provide the only access to the
financial system for certain groups.

In September 2019, the US Automated Teller Machine (ATM) enjoyed its 50th birthday. Two years
earlier, its British forerunner, the cash dispenser, did the same. On both occasions, celebrations
were surprisingly muted, with the media on both sides of the Atlantic scarcely mentioning this
milestone in financial technology. This was, however, a great cause of celebration for all of us that
have served in the ATM and cash industry and we gave the ATM its proper merit during many
events across all continents.

Overall though it was strange that most of the media ignored this important milestone given that
the ATM was not just the original ‘fintech’ solution but also has a social value far beyond that of the
cash it dispenses. After all, the arrival of the world’s first automated cash dispenser in 1967 changed the way we bank, the way we pay for goods and services, and our relationship with money forever. It transformed our lives by ushering in a post-war world of self-service where consumers had to trust and interface with a machine for the first time. In its way, the ATM was just as disruptive as the introduction of the iPhone.

Why is the ATM Undervalued?

So, why is such an iconic and transformative machine so undervalued? Perhaps it is because
of the way it looks? A grey, metallic utilitarianism might ooze solid dependability, but it does not
exactly inspire. In a way, it is kind of the Volvo of the payments industry, dependable but not
“sexy.” Conceivably a great part of the reason may have to do with our evolving attitudes towards
cash in an increasingly digital world. With the advent of new payment choices such as mobile and
contactless payments, perhaps some see the ATM as a fountainpen in a touchscreen world - the
quaint legacy of a bygone era? In certain high-income societies this may be understandable. Where
the point-of-sale infrastructure is robust, the electricity supply reliable and security guaranteed, there is a convenience and cost case to be made for going digital.

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