HOUSTON—The demise of cash has been greatly exaggerated, according to one credit union observer, and it remains king—for now.
Gary Walston, co-founder of Dolphin Debit Access, observes that he has been hearing the same refrain for 20 years.
“Over the year, the demise of cash has gotten a lot of press,” he said.
While Walston acknowledges the universe of payment options has widened considerably in that time, he also noted, “We still haven’t seen any degradation of transaction volumes.”
Walston’s comments are part of a series by CUToday.info examining “Fake News” within credit unions--that is, misconceptions that need to be corrected and deserve more thought.
Broadly speaking, cash payments aren’t increasing—but they aren’t decreasing, either, he said.
“ATM transaction volume has plateaued,” Walston said, adding the 1% to 2% growth each year is roughly on pace with population growth in the country.
The Misperception
But credit union operators have a misperception around the trendline, Walston said.
“Some see average transactions per ATM have gone down in the last 10-15 years,” he said. But what really has happened is that there are more ATMs dividing the volume.
“It hasn’t been dethroned,” he says. “Cash is still king” as the preferred payment method in America and globally.
Debit cards have come online strongly in recent years, Walston said. But for smaller transactions, those of $10 or below, cash is still the preferred payment method. Digital wallets and mobile payments have yet to dethrone cash as the top payment method, but could eventually do so as acceptance and POS terminal access expand.
Gary Walston
Approximately 80% of ATM transactions are still all about dispensing cash, with the other 20% is split between deposits and balance inquiries. “The ATM’s principal purpose is no different than it was 30 or 40 years ago, to deliver cash quickly,” he said.
Although ATMs are a mature technology, there is still innovation going on, Walston said, citing “image deposit” ATMs that can make images of cash and checks, verify the funds, and credit the member’s account, as one example.
“Mobile capture is fantastic,” he says, “but it is still limited to checks.”
'Further Off in the Future'
Image deposit-enabled ATMs got their start 10 years ago at Tier I banks, he explained, but added that over the past four to five years the technology has spread widely to credit unions and community banks.
One thing that hasn’t changed much is actual cash management, according to Walston. It still requires armored cars and armed guards picking up cash from a bank vault or Fed branch and the refilling of the machines—by carrier personnel at standalone machines outside a branch, or branch employees if the machines are inside or connected to the bank through a wall.
“In the future, there is a chance cash will be used less,” he says. “But it’s a little farther off in the future than many have written.”
Dolphin Debit Access (which has principal offices in Houston and New Orleans) is an ATM management firm with credit union and bank clients. Some of the credit unions it features on its website include Sabine Federal Credit Union, Statewide Federal Credit Union, Memorial Credit Union, Mississippi Postal Federal Credit Union, Keesler Federal Credit Union and others.
—Mark Fogarty