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Written by Cyndie Martini
on September 28, 2017

The ATM industry reached a milestone this year: As many as a half-million ATMs are now in use throughout the U.S., according to data collected by ATM Industry Association. This comes after several years of unimpressive growth and changes to the financial industry that have complicated upgrades and replacements.

"These numbers confirm what we have suspected in recent months," David Tente, ATMIA's U.S. executive director, said in a press release. "There is growing recognition of the important role that ATMs play in our payments system, and alongside of it, in a new wave of branch transformation that is sweeping through the banking industry."

Over the past few decades, ATMs have ingrained themselves in the American payments landscape and now play an essential role. According to one study conducted by ATM Marketplace and Italian software provider Auriga, 63 percent of respondents in the U.S. and the U.K. use ATMs on a monthly basis, Credit Union Times reported. Additionally, most of the respondents said they'd prefer to live near an ATM than a bank branch, further highlighting the importance of these quick and intuitive devices.

ATMs are evolving

While the report from Auriga and ATM Marketplace clearly showed consumers' preference for ATM accessibility it also found many want to see increased capabilities in these machines.

  • 70 percent said they'd like the option to choose their bill denomination.
  • 39 percent said ATMs should facilitate real-time transactions.
  • 34 percent said ATM security should use biometric data rather than PINs.
  • 32 percent said they want to be able to cash checks at an ATM.
  • 19 percent said they want to be able to pay bills from an ATM.

The technology for each of these abilities is available to ATM providers already, though isn't necessarily widely implemented. ATMIA pointed out that one of the reasons for the stagnant growth in ATMs over the past few years was due to the slowed economy as well as complicated upgrades for Windows software and the transition to EMV capable machines.

Now that the economy has largely recovered and more financial institutions and businesses are investing in new ATMs, these advanced features may become more prominent throughout the nation, Digital Transactions noted.

"We're already seeing that most discussions about branch transformation include ATMs and other self-service options as a pivotal element of the strategy," Tente explained to Digital Transactions News in an email. "And leading independents are all opening up to the idea of additional transaction types on retail ATMs, particularly things like money-transfer options."

EMV compliance should be top of mind

Since more consumers would prefer to stop by an ATM for a quick banking transaction and many are expecting to be able to perform multiple functions with the machines, it makes sense that credit unions will begin to invest in new or additional ATMs in convenient areas for their members.

ATMIA pointed out that new branches are likely to be smaller and rely more heavily on ATM capabilities to serve their members. As decision-makers consider their options, it's important they seek out EMV-compliant ATMs.

While EMV compliance isn't law, it would behoove credit unions to go through with the update. The shift in liability means that they could incur fees related to fraud at a noncompliant ATM they own or operate. And, as EMV ATMs become more prominent, fraudsters will begin taking note of the outdated models still in operation. These could very well become targets, meaning the chances of fraud occurring could increase.

ATM Marketplace reported that, at the end of 2016, 60 percent of ATMs throughout the U.S. will be EMV-enabled, and expect 80 percent to be so by the end of 2017. Big banks have been some of the quickest to implement the upgrades, while credit unions tend to lag behind.

Choose features carefully

As credit unions seek to update their ATM offerings, they'll likely evaluate other features in addition to EMV compatibility. ATMIA found that financial institutions of all types and sizes are looking into contactless cash withdrawal and person-to-person money transfer capabilities. Other potential offerings include the ability to purchase tickets, make charitable donations and to purchase, use or refill prepaid debit cards. Further, newer models of ATMs have video chat services so users can communicate directly with a teller in real time.

When sorting through the plethora of capabilities, it's important to keep consumer wants and needs in mind. According to Auriga and ATM Marketplace, however, fewer than 10 percent said they'd want contactless cash withdrawals at ATMs. Few respondents also showed interest in ticket purchases, contributions to charity or prepaid functionalities. Close to two-thirds said they'd rather just drive to a branch than try to use a video ATM.

However, that's not to say these capabilities are never helpful. A credit union that has a wide reach or a significant number of members in rural areas may benefit from video-enabled ATMs so these members can perform certain transactions without having to make the trip to the nearest branch. Additionally, if many of your members have prepaid cards they use on a regular basis, an ATM that allows for easy transactions, reloading and balance previews may be welcomed by users.

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