Retail ATMs evolve to meet emerging needs

With the onset of mobile payments, and the continuing growth of cashless payments options in general, some have questioned the need for ATMs, particularly outside of the bank in retail spaces.

Yet cash usage still remains relatively strong, as a Federal Reserve' System's FedCash Services study found the average amount of cash held in an adult's pocket, purse or wallet grew from $68 to $73 this year. As a result, there still remains a need for ATMs in a variety of spaces, including retail.

Even setting aside cash, ATMs are useful for more than just cash withdrawals. With the growth of cash recycling, bill pay and cryptocurrency integration, retailers can offer customers a variety of services with ATMs.

For example, bitcoin ATMs are on an upward trend in 2023, with more than 36,000 machines deployed worldwide. Although the machines saw a downward turn in the first quarter of 2023, it has rebounded, with a net gain of more than 2,500 machines since May, according to coinatmradar.

On the banking side, as banks roll back or streamline their branches, they are using ATMs as full self-service banking solutions, where customers can do more tasks outside of bank branch, such as pay bills, deposit cash or checks or more at off-site locations such as retail ATMs.

To learn more about retail ATMs as a whole, ATM Marketplace spoke with Ryan Loebs, senior director of retail cash mManagement solutions at Hyosung Innovue Americas.

Q. What do you see as the primary value proposition for ATMs at retailers?

A. The primary value proposition for retail ATMs comes down to providing convenient access to cash for consumers. Retail ATMs offer banking convenience without having to visit a bank branch, allowing consumers to "bank on the go" while shopping or running errands. In addition, Retail ATMs increase foot traffic to retail establishments and drive new revenue streams.

Q. What are some of the innovations you see with retail ATMs?

A. Some of the innovations seen with retail ATMs include the integration of advanced software and hardware features. These innovations focus on improving functionality, security, and user experience. One notable innovation is the integration of improved security measures such as encryption and biometric authentication, which provide an additional layer of identity verification and protect customer data. Enhanced user interfaces make navigation and transaction processing easier for users. Cash recycling capabilities reduce the need for frequent cash replenishment, minimizing costs and enhancing operational efficiency. Innovations also include features like cash deposit functionality, contactless card readers for secure transactions, and integration with mobile devices, enabling users to initiate transactions through mobile apps. These innovations not only enhance security but also provide a seamless and user-friendly experience for customers using retail ATMs.

Q. What innovations are Hyosung Innovue delivering?

A. Hyosung Innovue is the market leader in retail ATM deployments. We invented the retail ATM market in the late 90s, and are set to reinvent it with our brand new Cajera "recycling" ATM Series. Historically, recycling was an experience designed for bank branches only. The devices are big, expensive and not tuned for the retail environment. Our Cajera Pivot ATMs — which offer recycling on up to three denominations — are the same size as a traditional dispense-only ATMs and within a similar price point.

Recycling opens up a vast array of new consumer services that require cash-in capability. Everything from traditional banking deposits to money remittance, bill pay, cryptocurrency purchase and more. In addition, retailers can take advantage of recycling ATMs, depositing excess store cash directly to the devices to receive credit to their banking account next day — no more daily trips to the bank!

And with cash-in, the ATMs are constantly replenishing themselves for that next cash dispense — thereby creating cost saving efficiencies for ATM operators and increased uptime for consumers. No more "Sorry — this ATM is out of cash."

In addition to hardware innovation, Hyosung Innovue is introducing TangoNet, a comprehensive cash management system. TangoNet provides an ecosystem solution that enhances functionality and connectivity for ATMs. It enables seamless integration with various services such as mobile payments, loyalty programs, and additional financial services, expanding the capabilities of retail ATMs and enhancing the overall customer experience. Think of it as an app store for ATMs — we've pre-built the apps, the ATM owner decides which one's to turn-on.

Q. Where do you see the ATM's role in the larger self-service retail space?

A. In the larger self-service retail space, ATMs play a crucial role as a convenient and efficient means of accessing cash and conducting banking transactions. They serve as an additional service for customers, attracting foot traffic to retail establishments. While the retail landscape is moving towards digital payments, there is still a significant portion of the population that relies on cash for their transactions. ATMs provide a bridge between the digital and physical currency worlds, catering to customers who prefer using cash or may face limited options for digital payments in certain locations.

Moreover, ATMs complement other self-service technologies in the retail environment, such as kiosks and mobile payment options. Self-service capabilities provide a a bridge between digital and physical currencies. ATMs have the potential to evolve into comprehensive self-service kiosks, expanding their role in the overall retail industry.

Q.Can you share on data on ATM usage in retail?

A. The Federal Reserve released a study indicating cash withdrawals are down 10% year over year, over the past three years. That said, the average withdrawal amount is up over 30% — so consumers are visiting less, but taking out more. A lot of this behavioral change was driven by the pandemic — which forced consumers to find new ways to leverage digital payments and services without leaving their homes. It is our belief that a convenient, retail-based cash-in network, which offers advanced services for payments and wallet loads, will drive a resurgence of foot traffic to the ATMs and retail stores alike.