Something interesting is afoot in the U.K. ATMs are becoming harder to find and as a result cash usage is down. This decline in ATMs has been accelerated by the COVID-19 pandemic as branches are closing and store-based ATMs are also becoming scarcer as establishments close or ATM are removed to promote social distancing.
A recent article in the U.K. version of Wired magazine, The pandemic has killed cash, cites some scary statistics for those who still use cash:
ATM withdrawals dropped 60 per cent when lockdown began in March, according to Link, the UK’s largest ATM provider. Constituency data obtained from the GMB trade union shows that cash machines are vanishing at a breakneck rate, with an 8.9 per cent drop across the country from April to June. Throughout lockdown 9,000 ATMs disconnected from Link’s network at some point – a result of public places closing during the peak of the first wave, or neighbouring machines being removed to promote social distancing. As of July, only 33 per cent of these had been reconnected. While withdrawal volumes picked up once restrictions eased, figures from as recently as September 20 show that usage is still 40 per cent lower than it was this time in 2019.
The pandemic has brought on a surge in the use of plastic for many consumers around the globe. As we all know, e-commerce and remote purchasing has skyrocketed while in-store visits have declined, largely by necessity driven by the pandemic. Many of the new ways to acquire products and services rely on some form of card payment rather than cash. All this accelerates the timeline for a “world without cash.”
As the article makes clear, the drive to a “world without cash” is not without casualties. There is still a portion of people who rely on cash. The reasons for their reliance on cash could be a lack of technological savviness, perhaps being unbanked or underbanked, distrust in the banking system, or a simple behavioral comfort with cash. Whatever the reason, the article provides examples of people who are having a difficult time finding places to get cash and the problems they face as a result.
Will there be a significant decrease in available ATMs in the U.S.? Probably not any time soon, but that doesn’t mean that it isn’t in the future. Data from Mercator Advisory Group show American reliance on cash declining and the bulk of cash transactions are going to small ticket purchases (think QSRs and convenience stores). To combat the potential of the exclusion of cash users, some municipalities in the U.S. are mandating merchants accept cash.
In summary, if you want to see how cash will fare in the future, keep an eye on the number of ATMs installed.
Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group