In this blog: What are reverse ATMS? Why were they needed? What are their advantages and use cases?
I think it’s safe to assume that most adults are familiar with Automated Teller Machines or ATMs and these machines have become a permanent fixture in our lives as a lot of us still require cash because we may be living in a cash reliant economy or we may just have a habit of dealing in cash.
ATMs Are a Staple
In any case, ATMs have been commonplace for decades now with little to no innovation in their basic function which is to dispense cash after verifying your identity and indexing it to an account in your name. You would go to an ATM when you want to withdraw cash from your account using your ATM/debit card.
What Are Reverse ATMs?
A reverse ATM is exactly the opposite of that. They are cash to card machines where you deposit cash and it dispenses a debit card. Reverse ATMs are a very recent innovation in the banking industry and not many examples of this kiosk can be found publicly.
Why Were They Made?
Reverse ATMs were fast tracked towards production during the pandemic due to the growing emphasis and need for contactless payments. These machines serve those who don’t have a bank account or debit card but require a payment method for contactless or online transactions.
Another important reason for the existence of these kiosks is that a huge chunk of the world’s population is still unbanked. In the US alone, nearly 20 million people are still unbanked; that’s 6.5% of US households.
What Are the Benefits of Reverse ATMs?
As opposed to opening a new bank account and waiting weeks for your debit card, reverse ATMs issue an active prepaid debit card instantly; no spending hours at a branch with an account manager, no waiting weeks for a debit card to be issued, no calling a helpline to activate your newly issued card.
Bred by The Pandemic
During this ongoing global health crisis, the use of paper money became a huge hazard because of how many hands it exchanges and how many surfaces it touches. A lot of establishments stopped accepting physical currency notes altogether in favor of contactless payments via card or mobile wallets.
The issue was that not everyone possessed access to a debit/credit card or mobile wallets be it elderly individuals or others who chose to keep their cash liquid. For these people reverse ATMs were a godsend as they could simply top up as much as they needed to use instead of maintaining a minimum balance in a bank account. Not to mention, reverse ATMs are extremely easy to use for people of all ages.
Reverse ATMs And Tourism
Reverse ATMs present a great case for the tourism industry as well. Often, travelers carry a lot of cash with them to exchange with the local currency of their holiday destination, but with a reverse ATM, they can simply issue an active VISA or MasterCard that works anywhere in the world.
Check out how Wavetec is helping with its Queue Management Solutions in the banking and retail industry.
Transition To A More Documented Economy
Some economies are still quite reliant on cash, wherein most day-to-day transactions are still being conducted on a cash basis, and paying with cards or mobile wallets is rare or accessible to a small percentage. Reverse ATMs can help these nations transition towards a more cashless economy.
Cash-reliant economies often breed malicious activity that where huge sums of money are laundered, which cannot be traced due to the transactions being cash-based. Going cashless makes economic activity documented, and more people now fall into the formal economy, unable to hide their income and avoid taxes.
Reverse ATMs are also a great solution for online purchases; you can deposit the amount you intend to spend and receive a prepaid debit card activated for e-commerce transactions. This is also especially useful during the pandemic when e-commerce is so prominent and often the only channel for some businesses to list their offerings.
Another important aspect of the eventual widespread availability of this technology is the increased accessibility of cashless money mediums to those who previously did not have access to plastic cards; those who were kept from opening bank accounts because they lacked certain documents or those who didn’t have access to bank branches.
So far, these kiosks have been deployed at a lot of major league sports stadiums where the intended use is for visitors to convert their cash into cards for seamless transactions at concessions stands for snacks and merchandise where using cash would be a huge public health risk during the pandemic.
The Future of Reverse ATMs
Reverse ATMs are the first real innovation in ATM technology and their timing was impeccable. Some reverse ATM companies have reported that they have received orders of thousands of these kiosks from various companies. These statistics would suggest a very successful and bright future for this new self-service technology.
Azimut Self Service
Azimut is a self service solutions provider that focuses on bringing you the best end to end solutions available in this ever growing industry. Azimut is a part of the Wavetec Group, serving some of the largest banks, telecoms and mobile financial services providers in North America, Africa, and Central & Southeast Asia.
Check out similar blogs: