Years ago, automated teller machines (ATMs) were once reliable stops for cash withdrawals. However, with the rise of digital banking and mobile payments, the relevance of ATMs is diminishing.
Major South African banks have been reducing the number of ATMs across the country due to the shift towards digital banking. This trend is not unique to South Africa, as other African countries like Nigeria and Kenya are also experiencing a decline in ATM usage.
The cost of operating ATMs, including maintenance and security, is a significant factor driving banks to focus on digital infrastructure. Mobile banking apps and contactless payments are becoming the preferred methods for accessing money digitally.
Despite the shift towards digital payments, cash remains a popular choice for transactions in South Africa. The reduction in ATMs could lead to challenges for those who rely on cash, such as longer trips to find ATMs and higher withdrawal fees.
Independent ATM Deployers (IADs) have an opportunity to fill the gap left by banks reducing their ATM presence. These companies are deploying ATMs in various locations, including rural areas, to meet the ongoing demand for cash access.
The decline in ATM usage raises the question of whether ATMs are slowly becoming obsolete or if the decline is overstated.