The range of payment methods available to consumers is expanding all the time, but cash still remains very close to many people’s hearts. At no time of year is this more evident than Christmas, when banks need to be ready for a seasonal spike in cash withdrawals from their ATMs.
Christmas shopping makes a huge contribution to this increase, of course, but there is also a lot more socializing and leisure time for people to enjoy at this time of year. That fuels demand for ATM withdrawals, so it’s crucial for financial institutions (FIs) to ensure that their network is equipped to handle it.
Just how busy do ATMs get?
There are more than three million ATMs in operation around the world, each handling an average of 2,700 transactions per month. The typical withdrawal amount for each consumer is around $60, but this figure can be expected to rise significantly during busy periods like the Christmas holiday season.
LINK, the UK ATM network, recently published figures showing that UK cash machines dispensed a total of £1.8 billion ($2.2 billion) in the first four days of December alone. That’s seven percent, or £121 million more than the same period last year.
John Howells, LINK chief executive officer, said: “These figures show that cash usage is up as consumers go out determined to enjoy the festive season. This extra money being withdrawn from ATMs is great news for small shops, pubs and restaurants as a lot of cash is used for general discretionary spending associated with going out and attending Christmas celebrations.”
UK cash machines look set to be particularly busy this Christmas, partly because of the lower value of the pound in the wake of the Brexit vote. Foreign shoppers are flocking to shopping hotspots to make the most of their stronger domestic currency.
Jace Tyrrell, chief executive of New West End Company, said luxury London districts like Bond Street and Oxford Street have enjoyed “a positive boost, driven by an influx of international shoppers looking to make the most of the weak pound”.
“Christmas trading is expected to hit a record-breaking £2.34 billion as a result,” he added.
Another important factor to remember is the unique tangibility of cash – a characteristic that electronic payments don’t share. Physical currency is something you can hold and give to another, making it a universal gift option, even for the ‘person who has everything’. Think of the happiness that a child experiences for example when given cash gifts at this time of year – a joyous reaction that couldn’t be replicated with an electronic payment.
Make sure your ATM network can cope
One element of an FI’s business that will prove absolutely crucial when it comes to preparing an ATM network for seasonal rushes is a cash management strategy. If a bank gets it right – through deploying functions like demand forecasting and process automation at the ATM – cash management can help achieve the right balance of cash across the branch and ATM network. This reduces the risk of something that could have a damaging impact on an FI’s reputation at this time of year – ATMs running out of cash at the time your customers need it most.
FIs planning for the long-term ultimately need to think about what type of machine would be best-suited to certain locations. In the busiest areas, banks can maximize efficiency by deploying ATMs that have been specifically designed to handle high transaction volumes.
In-built ATM solutions like cash recycling can also prove extremely effective for guaranteeing the best possible availability for customers, while addressing risks like counterfeit notes.
By planning in advance and choosing the right solutions and strategies for the ATM network, FIs can increase the chances of every Christmas being a happy one for themselves but most importantly their customers.