The cashpoint, the core convenience innovation in traditional banking in the late 20th century, is being superseded by the rising popularity of money transfer from local outlets and new apps that enable device to device cash transfers worldwide.
Analysis by Xpress Money suggests that cashpoint usage will decline in the way that phone box usage has declined, as money transfer services via corner stores and smartphone apps enable consumers to access cash wherever they are, removing the need for a visit to a cashpoint.
The shift in behaviour will be as dramatic as the shift when consumers traded queueing at phone boxes for mobile phones, according to Xpress Money.
Sudhesh Giriyan, COO of Xpress Money, said: “At their peak there were just over 80,000 phone boxes in the UK - and today there are around 70,000 ATMs nationwide. The dynamics are similar. Phone boxes and ATMs offer a location-based transaction. Today, though, only 3% of the population use phone boxes - and our assumption, over time, is that the same decline in use will apply to ATMs as consumers become more accustomed to the use of money transfer services via their corner store or via an app.”
A growing proportion of consumers now rarely use cash for the majority of their purchases, and this is particularly true among younger consumers, with those over the age of 65 by far the most reliant on cash. Experts predict that within the next ten years, the proportion of consumer purchases made with cash will decline to around one third of all transactions, compared to the current figure of just over half.
The money transfer market has exploded in recent years. Annual non-bank transfers of cash amount to around £400 billion globally or £54 per head for every person on the planet - the equivalent of each person transferring one pound per week. Recent findings from Juniper Research found the number of mobile money transfers is set to increase by 150 per cent in 2015 to more than 15 billion. Innovation is driving the global remittance market with new mobile platforms delivering convenient and secure methods of transfer via social channels.
Social integration of money transfer will enable family and friends to transfer money to anyone from anywhere and at any time of the day, creating a global money transfer service that eclipses the versatility of banks.