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Totally agree. I am actually surprised at the number of banks still doing business, with no clear differentiators! 

Maybe one way to differentiate for banks could be to charge for transactions. What can they do to get their customers to pay for the transactions?

I think that the low trust for banks is due to their own mistake. Cost savings and improved efficiencies drove all banks to discourage their customers to visit their branches and hence driving banks to become the faceless, heartless corporate machinery. And once that happens, the trust level automatically goes down.

In my opinion, retail banking is in for an overhaul sometime soon in the future.  

Great blog post with some interesting thoughts.

Another thing that the banks can do is to connect their various customers and enable commerce between these customers. This opens up another source of competitive advantage for the banks. If done well, this can create a viral growth as the value of the network will grow exponentially with every additional node and will become more and more difficult to break this network --> Sustained competitive advantage for the bank that gets this right the first time. 

Alexander - The questions that you are posing are very valid and important for organizations like Visa or AT&T to think and find an answer.. 

This also provides an opportunity to the other players in the ecosystem - The mobile operators, Software organizations that develop apps & the handset manufacturers to think of the role that they want to play in the game.. The larger their canvas, the larger could be their opportunity.. 

Thanks for sharing your insights. 

Arvind - Thanks for sharing this information.. I was not aware of this information at all.. 

Do the banks still charge the merchant the same 2.5% for the card transaction for this withdrawal? If so, I can understand why this never took off in India... 

So, many times, we are afraid to let go of traditional ways of charging our customers that we could potentially miss out on a much bigger opportunity..

Is this one such opportunity for the banks? I think this is a question worth asking..

And thanks for keeping the conversation going.. That is what makes these communities tick...

Swaminathan - Thanks for keeping the discussion alive.. I would like to re-iterate again that I am not trying to advocate the idea about retailers replacing ATM's..

All I am saying is that before banks and ATM manufacturer's go in for an ATM refresh, in terms of design or implementation, it is worth questioning if there is a real need for an ATM or if the function of the ATM can still be addressed without having to invest significant amount of money on the infrastructure.

The answer could well maybe that we are not ready to do away with all the ATM and its network, but then we would have validated the fact after having put in a lot of thought and not because of 'habit'.

If that turns out to be the case, the next question that needs to be asked is if we do have the ATM network, what more could we do with it?

It is only by questioning & testing these assumptions will we be able to come up with significant or even disruptive innovations..

I can understand from your comments that you think that the ATM's are currently irreplacable. So, what more do you think we can do with these ATM's and their networks, apart from making them more easier to use ? Request you to do keep the conversation going.. 

Looking forward to hearing your comments.. 

Firstly, I would like to thank you for having taken the time to share your thoughts on my blog post.. 

As indicated earlier, the primary objective of the post was to raise a question - "Can banks think of a way to work without an ATM". 

The idea i suggested was only a spark to get the discussion going, which I am really happy that it has done. 

Also, regarding your comments the fact that the unorganized retailers in India not accepting cards - I think this is due to the fact that the entire business model is skewed in favour of the bank and the smaller retailers do not see much value in the offering. 

They need to pay rent for the card swipe machine, then there is a 2.5% charge on each transaction made via the cards. Then there is the hassle of keeping the signed charge slips safe and sending it to the bank and wait for the bank to transfer the funds to their accounts. 

If we could somehow make it more attractive for the retailer to use a card machine (I had suggested an idea in my earlier post). Once it is attractive for a retailer to accept cards, I am sure that this can still be explored.. 

Again, thanks for keeping the discussion alive! 

Thanks for your comment Christopher. I wasnt aware of this as in India, this simply does not happen..

If you want cash, you would need to either go to a bank or an ATM as the banks charge the vendor a processing fee for all the transactions being conducted with the card at the vendor, typically about 2.5% of the transaction value. Not sure if the same is also the practice in England or for that matter in Australia (As i also received a similar feedback, that shops do dispence cash at their counters). 

Also, the purpose of my post was not just to promote the idea of using this concept but also to question the reason why a bank should continue to invest in ATM's!