Why ATMs are slowly dying out

ATMs are said to be facing competition from alternative avenues of accessing cash as well as cashless payments. Net photo.

statistics from the National Bank of Rwanda are casting a strong cloud over the future of a key component of the banking sector, Automated Teller Machines owing to the recent innovations in the financial industry.

The 2018 August report of the financial industry showed that the number of the ATMs had gone down from 405 to 382 in a space of one year.

 ATMs are said to be facing competition from alternative avenues of accessing cash as well as cashless payments as recent innovations look to be more convenient.

ATMs are more expensive in comparison to alternative means. For instance, the cost of an Automatic Teller Machine is between $3000 and $10,000 while point of sale machines are as low as $200.

Mobile money agents have since increased by 50 per cent from June 2017 to June 2018 with a corresponding number of modern POS terminals reaching 332,825 in a by June 2018.

George Odhiambo Chief executive of KCB Rwanda, said that they are looking to all options available to serve our customers better and also keeping an eye on the market dynamics so that they can respond effectively.

“The industry is changing very fast and of course the frequency of ATM transactions has been on the decline looking at the numbers within the last five years. For the debit cards, a tangible shift is there meaning that to remain relevant there has to be further innovation to serve customers better,” he said.

Jeffery Ntambara, a Kigali based financial services subscriber, said that other alternatives like e-banking are time-saving and convenient but the charges are still very high compared to ATM use.

Experts say that market demands and customer preferences could see the machines use in the developing countries reduce significantly as options such as mobile money improve efficiency and meet more customer needs.