Awash in flood of ATMs

FDR may be selling Cashcard at an inopportune time.

Owners of ATM fleets may have found every plausible nook and cranny into which to stuff one of the now ubiquitous cash-dispensing devices.

Most banks have also stepped up their investment in their own, branded automatic teller machines. Banks have also increased the so-called foreign ATM fee (now around $2) and hammered home the message to customers that they are better off using an ATM owned by their own bank in order to avoid this fee.

In the three years since FDR bought Cashcard the ATM fleet has expanded by 19 per cent to 25,700 by June 2007. ATM fleet numbers jumped by 62 per cent in the three years prior as a cottage industry pushing the devices into pubs and clubs got organised, consolidated, attracted private equity investment and then got out.

This payments niche thus seems to have reached a mature stage in the cycle. The share of transactions on independently owned ATMs is now relatively stable at about 48 per cent, after years of growth.

Another key trend is the slowing of ATM transactions per account,  numbers dropping last year after steady growth.
Reserve Bank of Australia data on payment transactions analysed by MWE Consulting show the number of transactions per bank account at an independently owned ATM peaked at 15 in late 2006 and has since declined marginally.

Non-bank owners of ATM fleets - largely Cashcard, Customers and ICash - are counting on the introduction of "convenience fees" in place of interchange to support their business model.

In theory banks will cooperate to reprogram systems to cater to this from early next year after years of delays.