Non-bank ATM deployers expand in changing climate

Banks' efforts to boost digitization of services and reduce costs are expanding the opportunity for non-bank ATM deployers, as evidenced by recent research from RBR Data Services.

Research from RBR Data Services, a division of Datos Insights, points to continued expansion of the independent ATM deployer sector worldwide. While many banks have trimmed their ATM fleets in pursuit of cost savings and digitization, IADs have stepped into the breach with more than 17,000 new installations in 2022 and an 18% share of total ATM numbers globally, according to a press release on the research findings.

Image provided by RBR Data Services, a division of Datos Insights.

"IADs have proved themselves to be highly adaptable, recovering from the pandemic and finding continued opportunities for growth in a world where the role of cash and physical banking infrastructure is changing rapidly," Mandy Eagle, manager at RBR Data Services, who led the research, said in a prepared statement.

Mandy Eagle

IADs' progress is aided by their versatility; from partnerships with retailers, to buying up bank fleets, to expansion into tourist hotspots or underbanked neighborhoods.

US leads global movement

The U.S. has by far the most non-bank ATMs globally, mostly thanks to a proliferation of terminals in small retail premises with the IAD and merchant sharing the profits from surcharging. Non-bank ATM numbers in the U.S. remained stable in 2022, as post pandemic recovery eased off and demand for cash weakened.

Nevertheless, IADs account for more than half of the country's total ATMs and are generally outperforming the bank ATM sector. RBR Data Services forecasts ongoing modest IAD expansion in the U.S. in the future, with IADs expanding the number of terminals they operate through outsourcing agreements with banks.

NCR Corp. has become the largest U.S. deployer and is also the leading IAD charge globally, thanks to its acquisition of Cardtronics'international business and the Allpoint ATM network in 2021.

Bank partnerships address challenges

IADs and banks are finding more opportunities to collaborate, with ATM-as-a-service agreements proving a boon to IADs' market presence and solving the thorny problem of costly ATM maintenance and management for banks.

Outsourcing and ATM-as-a-service are the key to IAD growth in France, where non-bank ATM numbers nearly quadrupled in 2022, the fastest rise recorded in any country.

Brink's France, the country's largest IAD, struck an agreement with the BPCE banking group in 2019 to operate and manage the group's ATMs. Progress in the partnership in 2022 saw almost 7,500 ATMs transferred from the group's biggest banks to Brink's, leaving the IAD with a 20% share of the French ATM market.

The research also identified the importance of partnerships between banks and IADs in emerging markets to expand services to underbanked areas.

ATMi, a joint venture in Indonesia between a bank and a network, installed more than 3,000 ATMs in local convenience stores in 2022.

Meanwhile, Thailand's FSMART doubled its presence during the year, with the aim of reaching customers without access to the branches or terminals of its bank partner, Kasikornbank.

ATMs' functionality challenge

While IADs have traditionally offered a more basic and less functional range of services than bank ATMs, progress is being made in the areas of automated note deposits, recycling and other services at terminals.

The situation is shifting in countries where IADs are coming into possession of more sophisticated ATMs, as they acquire or take on the management of bank fleets. This is most advanced in Poland, where leading IADs Euronet and Planet Cash have built their fleets in large part from terminals bought from banks, and now operate ATMs offering services including cash deposits, contactless transactions and fund transfers.

"IADs will expand their footprint in the coming years, largely by re-purposing bank terminals into their own networks, rather than an organic expansion," Eagle of RBR Data Services said in a prepared statement.

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