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ATMs will still be important as mobile payments remain flat

ATMs will remain useful as latest technologies fail to match its convenience.

ATMs are the modern basis of cash payments. When people need money to pay for everyday goods, they will seek out an ATM to get the cash they need. Tech enthusiasts have long predicted that Americans will embrace some form of cashless payment system. However, despite the amount of time spent proselytizing mobile transactions, cash remains king. Banks should continue to invest in ATMs as more people focus on acquiring the funds they need to get through the day.

Mobile payments face tepid growth, ATMs still prominent

The newest fad in payments technology is mobile payments. The idea seems practical: Use near-field communication technology that is common in smartphones to complete the transaction without having to whip out cash or plastic. The process involves communications between the mobile device, the bank and the payment processor. The main advantage is that customers no longer need a wallet to carry all their credit cards or cash, relying entirely on the phone to complete the transactions.

However, in spite of the hype raised by many tech evangelists and banking analysts, mobile payment adoption has been far slower than anticipated. ATM Marketplace noted the most recent survey by Compass Plus, an electronic payments firm, found that 31.3 percent of payments and banking experts surveyed believed the technology would reach mainstream levels of adoption within the next five years in their region. While this is an optimistic stance, it's important to consider what previous surveys by the same company revealed. In 2011, the largest group of respondents, at 29 percent, said it would reach mainstream levels of adoption by 2013, while the 2012 survey said it would do so by 2015. Neither of these predictions came true.

The issue is that the enthusiasm experts have for mobile payments technology hasn't translated to actual action. Implementation has been slow for various reasons: The fragmentation of different payment standards by tech companies, the wide variety of mobile devices on the market and the lack of consensus regarding payment methods lead in terms of issues. It's possible that it will take much longer for mobile payments to gain headway, even with the advent of smartwatches such as the Apple Watch. With this in mind, cash will remain important. ATMs will facilitate cash's role in being the primary source, numerically, of payments from consumers.

October 16, 2015