Cash Popularity and Your ATMs

Contradicting proclamations that the world will become cashless and fully digital in the near future, cash is still the most commonly used form of payment according to the Cardtronics 2017 Health of Cash study:

  • Cash and debit are more frequently used for in-store purchases.
  • People still mostly prefer to give and receive monetary gifts with cash.
  • Cash payment is preferred in fast food restaurants and bars.
  • 68% of people use cash for purchases under $10.
  • Cash leads in charitable giving and checks remain a leading form of payment in this area.
  • 68% of those surveyed prefer cards or digital payments but specifically keep cash in their wallet as back-up form of payment and use it regularly.
  • Survey participants said they use cash because they value these attributes in payment methods: Convenience, Safety, Ease and Privacy.
  • Participants revealed that using cash helps them stay on budget because it “feels more real than other forms of payment.”

This is good news for ATM owners, who earn surcharge and network fee income on transactions at their ATMs. Beyond dispensing cash, each ATM also

  • generates income and reduces teller expense while providing convenience to cardholders and other ATM users.
  • serves as a public-facing representative of your financial institution.
  • is a marketing tool you can brand with external signage and customize with screen messages and graphics.

How can you maximize the potential of your ATM(s)? See below for some suggestions from Advantage.

1.    Purchase an ATM that best serves the needs of your institution, your cardholders and the public according to location. Will a cash dispenser suffice or will you install a full-service ATM or even an ITM (Interactive Teller Machine)? What telecom method will you use? Will it be located indoors or out? Has the location been predetermined or are you contemplating a move or addition of an ATM?

2.    Monitor “up” time so the ATM is available for use by providing software updates and equipment maintenance as needed. Fill cash regularly; use Self-Service Gateway to look up cash balances. Review and update your fault response process including contact information and contact timeframes.

3.    Perform exterior maintenance to keep the ATM clean and approachable. Make sure the area is well lit.

4.    Consider upgrading your ATM to attract more usage by adding services such as Fast Cash, Cardholder Preferences or Cardless Cash.

5.    Review data available to understand and influence cardholder behavior, increase usage and enhance profitability. Here are some questions you can ask in your research:

  • Is the surcharge at each ATM appropriate? (Surcharges can be set individually for each ATM.
  • Are your cardholders using your ATM(s) or foreign ATMs?
  • Are service fees for your cardholders using other ATMs appropriate? Your estimated average cost per transaction as an issuer for your cardholders using

– an Advantage ATM: $0.533

– an Allpoint ATM: $0.778

– your ATM: $0.06.

6.    Evaluate the location of your ATM(s). Is an ATM in the right location but needs more promotion?

7.    Do you market and promote your ATM locations? Advantage locations? Allpoint locations? Use StarView Settlement Manager reports to assist your research.

  • 3242E-04: Monthly Acquirer Summary by Terminal. “Not On Us” transactions are Advantage cardholders.
  • 3242E-08: Monthly Acquirer Summary- all Terminals. “Not On Us” transactions are Advantage cardholders.
  • 3245E: Monthly Surcharge Totals (Acquirer report; all ATMs listed individually)
  • 0431E: (Issuer) Daily Foreign Surcharge Report. Surcharges your cardholders paid for withdrawals listed by card number; does not include Visa transactions. (Used to target cardholders who are not using your ATMs.)
  • 3212E: Monthly Issuer Summary. “On Us” transactions are your cardholders at your ATM(s)
  • 3471E-00: Monthly Foreign ATM Usage Report. (Top 10 or 25 foreign ATMs your cardholders used.)

8.    What factors can you consider to determine profitability of your ATM(s)?

·   Income and expenses reported on Advantage invoice

·   Quarterly statistics provided by Advantage

·   Operating Supplies

·   Cost of Cash

·   Communication Costs

·   Security/Alarm Costs

·   Personnel Costs

·   Maintenance Contracts.

You may decide that certain ATMs do not need to be profitable if they fulfill a need for the location, give your institution a presence in the market, or serve a need for cash access in a market.

Hopefully this information will help you with evaluating your ATM program. If you need any assistance, we are more than happy to assist you! For more information contact Karen Powell at 605-335-5103 or [email protected]