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5 September 2024
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Cash is becoming less important as a means of payment, especially since the coronavirus pandemic. Cash withdrawals are declining accordingly: at the beginning of 2020, there were around 7,200 ATMs in Switzerland, compared to 6,120 today, according to the Swiss National Bank. At the same time, however, cash plays a key role in the economy and is indispensable for the majority of the population. Access to cash must therefore be guaranteed. This requires ATMs, but not too many; otherwise, the business becomes unprofitable for the banks that operate them. The solution to this dilemma lies in pooling – the idea that banks combine their ATMs under one roof and centralize operations to save costs and ensure service availability. In Switzerland, where some 240 financial institutions operate their own ATMs, the potential for synergy is enormous.
While the pooling solutions offered by SIX, the market leader in the ATM network, are only now gaining momentum in Switzerland, they have been successfully implemented in other countries for some time. In Sweden, for example, five of the largest banks announced in 2011 that they would outsource their ATMs to a separate company called Bankernas Automatbolag. There have been similar developments in Finland, where all ATMs have been operated by a single outsourcing organization since the 1990s. In the Netherlands, the three largest banks are in the process of migrating their machines to the Geldmaat network. What all these countries have in common is their low dependence on cash, which makes it easier for banks to enter into pooling arrangements.
In these countries, it is clear that pooling is a sensible strategy to make ATM operations more efficient while ensuring access to cash. In Belgium, the model is moving in the opposite direction. Instead of being reduced, it is being expanded. The number of ATMs has been declining rapidly for years. Last year, there were less than half as many as a decade ago. No wonder complaints about difficulties in withdrawing money are on the rise. Reason enough for the Belgian government to reach an agreement with the banking association last year to more than double the number of ATMs from around 1,000 to at least 4,000 by 2027.
A change in perspective is therefore emerging in the current debate. Where once there was a movement toward a cashless society, concerns about privacy, financial inclusion, and emergency preparedness are leading to a reassessment. The idea that cash should not disappear altogether is gaining support. Each country must find its own ideal distribution of ATMs. This depends on factors such as population density, economic activity, geography, technological trends, and regulation.
Gabriel Juri SIX
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