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Examining future ATM trends in 2022

Where are ATMs headed in 2022? Read to find out!

Examining future ATM trends in 2022Image via Istock.com


| by Daryl Cornell — President & CEO, Triton Systems of Delaware, LLC

As has been true every year, our predictions will likely prove to be off the mark, highly questionable or just plain wrong. And yet, we will prognosticate again this year, on the off chance that do manage to land a few correct guesses. Here is where we see the ATM industry headed in 2022.

Global cash use will continue to decline

Cheerleaders for cash will point to the consistent 1% growth in global cash as proof that cash remains king. Cashless advocates will again argue in 2022 that the use of cash, particularly for purchases under $100, continues to decline. Both are correct. Despite global inflation pressures, people around the world continue to hoard hard currency as a hedge against economic and political risk. This raises the demand for cash – particular large denomination notes. At the same time, alternative payment methods such as NFC and P2P have driven customer preference away from cash. COVID lockdowns have also fueled remote debit and credit purchases, negatively impacting the use of cash. In spite of the government and card brand bias against cash, global customer demand for payment choice will ensure that cash remains a viable payment option. However, overall consumer preference for cash as a preferred payment method will continue to shrink in 2022.

Global supply chain woes will continue throughout 2022

Most experts agree that the well-documented breakdown in international logistics will remain a reality in 2022. Factory production, ocean shipping, rail and trucking have all suffered from ongoing COVID breakouts and the 2021 spike in demand on the heels of a 2020 reduction in capacity. Longer product lead times, higher product prices and an expensive "just in case" inventory philosophy will all negatively impact the ATM industry in 2022. Financial institutions and independent ATM deployers should expect extended lead times, price increases and intermittent out of stock situations. While these conditions will hopefully ease sometime in 2023, they will remain a reality this year.

TR-31 "Key Block" upgrades will begin this year

The new global standard referred to as TR-31 (also known as "key blocks") has been mandated by PCI for the transfer of keys to ATMs beginning Jan. 1, 2025. Processors are already alerting operators that ATMs with legacy electronic PIN pads ("EPPs") will be rendered inoperable in less than 36 months. As with the recent EMV card reader upgrade and associated liability shift, many ATM operators will choose to "wait and see," rather than begin upgrading their fleets in 2022. The difference this time is that global supply chain challenges have already pushed out hardware lead times to a year or more. As a result, more IADs and financial institutions will begin proactively upgrading their ATMs beginning in 2022 to avoid the inevitable last minute rush.

ATM industry consolidation will continue

The global ATM industry is mature. Given the glut of global capacity, manufacturers are betting heavily on product extensions and non-hardware futures including "ATMs as a Service," recycling ATMs, FI core replacement acceleration, crypto ATMs, self-service checkout, hospitality automation and gambling kiosks. In the past 24 months we have seen a large spike in the number of acquisitions, as NCR, Euronet, Brinks and Cennox continue to gobble up competitors. Independent ATM deployers also continue to sell out as operating margins shrink and owners choose to retire. Despite high levels of debt on the balance sheets of many ATM manufacturers, a dearth of organic growth opportunities should drive additional M&A transactions in 2022.

ATMs will become more, and less complex

As financial institutions continue to wrestle with what branch transformation looks like, expect a continuation of the "barbell effect" in ATM spend. At one end, larger banks and credit unions are moving towards the implementation of six-figure ITM/ VTM technology. These ATMs promise increased functionality and decreased expense at branch and off-branch locations. The ability to accelerate transaction automation, increase customer satisfaction, and offload employee expense is the holy grail for many financial institutions. At the other end, smaller banks and credit unions are moving towards economical, cash dispensing ATMs. These reliable ATMs are supported for decades without software maintenance fees and untethered from regular Windows ATM upgrades. The casualty in this ATM shift will be mid-range ATMs which offer check and cash deposit functionality along with cash dispense. Financial institutions are increasingly realizing that the costs associated with this legacy ATM approach often far exceeds the incremental benefits.

Happy New Year and a healthy and prosperous 2022 to all!

INCLUDED IN THIS STORY

Triton Systems

21405 B Street // Long Beach, MS 39560 // 886-787-4688


Triton FI based products • NO Windows 10™ Upgrade • Secured locked down system that is virus/malware resistant • Flexible configurations - Drive-up and Walk-up • Triton's high security standards • NFC, anti-skim card reader, IP camera and level 1 vaults are all options • Triton Connect monitoring • Lower cost

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Daryl Cornell

Daryl Cornell is the CEO and owner of Triton Systems, a Mississippi-based ATM manufacturer, software, parts and service company.

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