Ready, Fire, Aim! - Mihail's Public Blog: The New New ATMs: Want Fries With Your Cash?

Initially conceived as a customer-service enhancement, ATMs began to be viewed as a potential profit center with the introduction of surcharges. As transaction volumes stagnate, however, ATMs are again being viewed as customer-service channels.

Reducing the need for tellers and other branch personnel is usually a big plus for the financial institutions, says Wharton marketing professor Barbara Kahn. “People are most expensive to banks. So as far as banks can eliminate that human aspect, it’s a good thing for them.” Stefanovic agrees, explaining that most financial institutions see ATMs as a service channel; some see them as a sales channel; and others see them as a branding opportunity.

 

...The advent of surcharging in 1996 saw a rapid increase in the number of ATMs, as banks sought to take advantage of the new revenue opportunity. But this growth essentially eroded any large opportunity for profits. Due in part to the rapid proliferation of machines, the number of transactions at each ATM has been going down. According to ATM&Debit News, monthly transactions per ATM declined from 6,876 in 1992, when there were 87,330 terminals, to 3,308 in 2002, with 352,000 terminals.

 

The 2002 ATM Deployer Study by Pulse and Dove Consulting reports that on average, the monthly operation cost of an ATM is between $1,000 and $2,000, while monthly revenues are only slightly – if at all – higher. In addition, as debit cards and cashless transactions become more popular, demand for cash withdrawals is expected to decrease.