How Canadians interact with money - both physical and digital - is changing as financial technology evolves.
With finance technology changing so constantly and quickly, will your trip to the ATM change too? Curt Binns says you can bank on it.
“The ATM will evolve. Ten years down the road it may be totally different, but there will be some kind of a dispenser for cash,” says Mr. Binns, executive director of the not-for-profit ATM Industry Association–Canada (ATMIA-Canada), part of a global network representing the owners of more than 2.2 million money machines.
Future concept: Irving
Irving is a cardless, screenless bring-your-own-device ATM concept by Diebold Inc. of Canton, Ohio. Users can pre-stage a transaction on their mobile device prior to arriving at their financial institution and authenticate themselves at the ATM using iris scanning biometric technology, near field communication or by scanning a QR code. Once authenticated, their pre-staged transaction is completed. (Diebold)
Though the ATM, or automated teller machine, is not even 50 years old – the first workable one appeared in Britain in 1967 – it is getting hard for most people to remember a time when getting money out of the bank meant going to the bank and asking for it.
What could come out next from the ubiquitous ATM? Soft drinks? Photos? Pez?
Not quite, but in the future ATMs may dispense more than cash – think more about the types of transactions you make either over a counter or online, says Mr. Binns.
“Things like lottery tickets, event tickets, your transit pass,” he explains. Just as payment technology is ever more mobile, using laptops, tablets, phones and now watches, ATMs are becoming more versatile and multipurpose, he says.
Even though financial institutions are beginning to incorporate contactless transaction systems, which allow users to wave a mobile device to pay, ATMs are here to stay, Mr. Binns says.
“The wearables [banking via mobile devices] may be a fad. Banks, credit unions, software developers are already looking beyond paying by phone and gadgets and the like,” he says.
In fact, ATMs are morphing into one-stop shopping machines that don’t compete with portable or wearable devices – they communicate with them. ATM manufacturers aim for the innovations they are developing to keep their machines in circulation for a long time.
Earlier this year Diebold Inc. of Canton, Ohio, the world’s second largest ATM maker, purchased its next largest rival, Germany’s Wincor Nixdorf AG, for $1.8-billion (U.S.). The acquisition vaulted the combined firm ahead of the industry’s leader NCR Corp.
The Financial Times reported that Diebold’s chief executive officer Andy Mattes plans to double the company’s software engineers and predicts that the replacement period for ATMs will shorten from the current seven-to-10 years down to between 24 and 36 months.
Even as the takeover takes hold, Diebold has been testing new “smart ATMs” with JPMorgan Chase & Co. and Citigroup Inc. in the United States.
Smart ATMs are part of a trend toward machines that respond to phone- or watch-based apps and which will no longer require users to insert a plastic card.
Future concept: Janus
Janus is a dual-sided self-service concept by Diebold Inc. of Canton, Ohio, that is capable of serving two users at the same time. An interactive touch screen enables multiple cheque imaging, ID scanning for new accounts and document signing. Users are also able to access a remote teller for assistance with complex transactions via two-way video conferencing capabilities. (Diebold)
“That would prevent skimming [stealing data from a card or a user’s pin number to scoop out funds],” says Janet Ecker, president and CEO of the Toronto Financial Services Alliance.
“We’re seeing lots of interesting new technologies already – biometrics, iris scans, thumb prints. There are even devices that can measure your individual heartbeat.”
Drawings of prototype ATMs show machines that look slightly different than current ones – less like the stand-up kiosks we are used to and more like desktop computer towers looked a few years ago.
One of the most anticipated technology leaps in the world of ATMs is already here – NFC, or near-field communications. NFC refers to the ability of a smartphone to send information to another screen, the technology that enables ATM users to sign in by phone instead of card.
In the United States, Wells Fargo has been rolling out NFC-enabled ATMs since February, aiming to make 40 per cent of its machines compatible with Android Pay by the end of this year, the website Marketwatch reported.
Marketwatch also reports that even back in 2014 – light years ago in the tech world – a U.S. survey by market-research firm Mintel found that 44 per cent of consumers were interested in a mobile app that would let them withdraw cash without a card.
A further 72 per cent were interested in ATMs that allow advanced features such as splitting deposits among different accounts or taking credit card or loan payments. Other anticipated features for new ATMs include the ability to cash cheques (as opposed to depositing and withdrawing from an account) and to be able to connect online at the machine to a live online chat for help.
The continued presence and advancing technology of ATMs mean that it will be less necessary than ever for consumers to need to visit a bank, which has implications for the staffing and infrastructure of financial institutions.
Mr. Binns says there is also a lot at stake for the companies and sectors that depend on having ATMs.
“Too many industries are tied to the value chain” for ATMs to go away, from its designers and manufacturers to the armoured car companies that move around cash, he says.
Many companies, countries and regions still need ATMs, he adds. A Research and Markets report on the global ATM market in 2015 suggests the greatest growth will be in the Asia-Pacific region, due to a growing banking population.
And in Canada, “If you take away ATMs from some northern communities, you take away their ability to get cash.”
· An ATM prototype was patented in 1939, but the first working ATM is believed to be the creation of Scottish inventor John Shepherd-Barron, who persuaded Barclays Bank to open one in a London suburb in 1967.
· Plastic cards weren’t in circulation yet, so the first ATM used special cheques coated with mildly radioactive carbon 14 – no one reported illness from using these.
· The first Canadian ATM opened in December 1969.
· Canada has more ATMs per capita than any other nation, with 223 per 100,000 people as of 2014.
· In India, 25 new ATMs are installed every day.
Sources: BBC News, ATMIA-Canada, World Bank