Australians are well served by ATM networks but it won't last. According to the latest Reserve Bank Bulletin, there were 31,661 ATMs in Australia at the end of last year, an increase of around 20 per cent since 2008.Measured as machines per million inhabitants Australia has 1300, which places the country fifth in the world for ATM penetration behind South Korea, Canada, France and Russia.In 2009 regulation of the ATM system was changed so that ATM owners could set their own prices and charge directly. This replaced interchange fee arrangements.This change led to the entry of several dozen independent operators into the ATM market and an increase in the number of ATMs.About 55 per cent of ATMs are owned by independent operators, up from 47 per cent in 2010. The rest are owned by financial institutions.However, things have not turned out the way independent ATM deployers were hoping.Direct charging encouraged consumers to make fewer ATM withdrawals, and at the same time the use of cash has been declining. Withdrawals from ATMs have fallen from an average of 75 a day in 2010 to 60 a day last year.ATMs owned by financial institutions account for 75 per cent of all ATM withdrawals and 90 per cent of balance inquiries. There are about 130 transactions per machine per day at financial institution ATMs, compared with an average of 30 per day at independent ATMs.The RBA said declining cash usage would be challenge for the ATM industry. The number of ATMs can be expected to decline.Direct charges have gone up but that has not been enough to keep many independent operators in the business, and there has been consolidation.The average direct charge in July last year was $2.33 for using a "foreign" ATM, compared with $2.04 in 2010 and $1.69 in 2009. The average charge on an independently owned ATM last July was $2.57.The number of withdrawals on which a direct charge is paid has declined by around 20 per cent since 2010, implying a A$60 million reduction in fees.The RBA said rising fees would probably lead consumers to further reduce their use of ATMs.