Visa exec talks the future of banking, ATM evolution

The times they are a changin' when it comes to banking, payments and ATMs. Clinton Cheng, VP, global head of Visa/PLUS ATM Network, Visa took a deep dive into banking during the closing keynote at the Bank Customer Experience Summit, held in Chicago from Aug. 31 to Sept. 1.

Cheng first discussed the changes in technology over the last 50 years. A half of century ago consumers had a personal relationship with the grocer — today 80% buy some form of groceries online. With communication, prior to the pandemic, Zoom had 10 million users globally — as of January 2022, Zoom has 350 million users per day.

Pokemon Go was a major community sensation five years ago, involving 50 million users in five days.

"It took the radio 38 years to 50 million users. It took Facebook two years. Technology and connectivity have ensured that we are constantly connected. The rate of adoption of new products have never been happen," Cheng said.

When looking at commerce, in 2002, Craiglist was the most popular website in the world as essentially a declassified advertisement. Now it has been de-bundled into a variety of websites such as Etsy and Airbnb.

On the cash level, Cheng talked about several use cases of why cash is not as prevalent. For example, taxis used to only accept cash, now they accept mobile pay and cards. The Girl Scouts adopted card payments as "With cash, the average sale was four boxes now the average sale is five boxes with a card," Cheng said.

From Visa's perspective, Cheng said it took 50 years for Visa to get 3 billion cards to be used at 46 million locations. In the next five years he expects there will be 30 billion cards with 460 million places to use them, including the metaverse.

With banks, there have been big changes as well. Branches used to be "financial supermarkets," but now branches house tellers that act more as financial consultants more than sellers. Branches are also shrinking as banks close down many locations.

And customers still want self-service banking.

"On a Google search, ATM is five times higher on Google compared to branches," Cheng said. "Consumers are looking for ATMs."

At the moment, 85% of ATM transactions are in-network and 15% are out-of-network. Visa is striving to transform the ATM by both dealing with fees and limited functionality to deliver a better self-service experience.

Fees are continuing to increase at the ATM, while customers are continuing to look for ways around those fees. Cheng believes banks need to combat this by eliminating fees.

"We want to see more ubiquity, more self-service for everyone which would allow banks to focus on what they do best: servicing their customer," Cheng said.

And customers want more out of their ATMs. They want cardless access, deposits and other services.

"We want to see a transformation of ATM. We want to create ATMs that can be mini branches," Cheng said.