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Frictionless Payments
Written by Cyndie Martini
on August 04, 2016

In the days prior to the ATM's debut in 1967, people who wanted to make a withdrawal from their account needed to go to the bank and wait in line. Branches became congested and demand threatened to make longer hours necessary.

The ATM was introduced to reduce strain on individual branches. If there was a machine that could complete a simple task like giving a consumer $40 of his or her own money, there was no need to do this business in person.

In the years since, the ATM caught on quickly. According to RBR's "Global ATMs and Market Forecasts to 2020" report, there were a reported 3 million of these machines installed worldwide as of 2014, ATM Marketplace reported. Another million is expected to be installed over the next four years.

ATMs evolve

As the number of ATMs continue to increase, so do their wide range of capabilities. Originally developed to solve a singular, though important, need of banks and credit unions everywhere, these machines are now able to allow members to complete many other tasks. These functions include:

  • Choosing the denomination distribution of your withdrawal - for instance, members can specify if they want their money dispensed in $20s, $1s, $5s or a combination of bills.
  • Sending money or paying bills, such as credit cards or mortgage loans.
  • Depositing checks.
  • Reloading a prepaid card.
  • Buying stamps.

When asked what functions consumers would most like to see in their financial institutions' ATMs, many stated that bill payment and buying prepaid cards top the list. It's important that credit unions take note of this information and provide for their members unique needs.

Another key function that members want to see in their ATMs is cardless cash capabilities. This is the machine's ability to authorize and dispense a cash withdrawal without requiring the card to be placed in the machine, explained Payments Leader. Instead of a card, the withdrawal will be initiated through a mobile payment platform.This can increase security of the transaction and give members peace of mind should they forget or lose their wallet.

Reaching more members

With a wide range of capabilities, some members may have little reason to make the trip to their credit union's brick-and-mortar branch. In many ways, this is a good thing. These capabilities can allow a credit union's reach to extend beyond the city in which its main branch resides. Members living miles or hours away from the branch, but within a close distance of a capable ATM, can have all the benefits of being a member without having to go out of their way to get their banking tasks done.

Distance isn't always the only obstacle people must overcome to accomplish their banking tasks in a branch. For some, getting to a branch during its operating hours is a challenge. By offering ATMs that provide many of the same services that a person might need to accomplish, timing is no longer a concern.

As the payments landscape and ATMs continue to evolve, credit unions will need to pay attention to the market and keep up with it. Ensuring that ATMs provide the capabilities its members require most will help with member retention, and will show the member base that the credit union cares about their needs.

ATMs are accessible to any consumer, not just a specific financial institution's members. Because of this, a well-equipped ATM can become a useful marketing device. Nonmembers who use the ATM will be drawn to the credit union because they will get a glimpse of the customer care and broad capabilities the credit union has.

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