walkitout (walkitout) wrote,
walkitout
walkitout

A Bit More about ATMs, Cash Use and the future of Paper Money

_Cash Box_ barely got into cash recycling, which is a pity, because I had only just heard about it and was hoping for details, since the book is current.

One of the costs associated with cash for banks is moving the folding stuff around. In earlier phases of cash machines, they had to have new bills, but current generations actually don't like new bills; they like stuff that's been around a few times but not too many times. One of the things noticeable about the mobile experience in India, Kenya and elsewhere is that mobile phones are enabling a relatively small number of bills to circulate within a region a whole lot more: you get some cash, you go deposit it right away at a shop, the shop withdraws it immediately, the physical stuff crosses the counter, everyone is happy because everyone has a Real Bank as a counter party and the paper keeps moving instead of being parked somewhere for hours or days or months.

Some independently operated cash machines (and apparently some bank cash machines as well) are Cash Recyclers. Old Skool machines would take cash in an envelope if at all; it was a separate path from dispensing functions. The latest (and most expensive?) machines will now actually take the deposited cash and stick it in the dispensing cassettes, so the machine -- if deposits stayed roughly equivalent to withdrawals -- might not need to be serviced by a courier for quite a long while.

I'm not sure if this is happening yet, but it seems at least possible that a business with an ATM -- a bar, a Dunkin' Donuts, a c-store -- that allowed cash deposits might work really well, if it let the business avoid having to go to the bank to do a cash drop. They could cash drop into the ATM. Do the deposit On Premise, so to speak, thus avoiding the run with its attendant mugging risks. Best of all, if someone robs the ATM (say, by attaching a big chain to a truck and dragging it through the parking lot), it's not even the business' money anymore.

That's sort of what I'm trying to figure out. If this is true, then M-Pesa and similar could be a massive market for ATM machines in the future (especially if things like the Vortex ATM, with lower power requirements and solar features becomes widespread). The authors of _Cash Box_ seem to be thinking along these lines. But somehow, whenever I follow that line of logic (not to mention the Wells Fargo machines at McMurdo Station), I keep thinking "ATMs in Space!". Which just seems ridiculous.

Diebold's Cash Recycler options:

http://www.diebold.com/products-services/atm-self-service/terminals/cash-recycler/Pages/default.aspx

This isn't new stuff; Euro Zone regulations about not allowing suspected counterfeits to circulate slowed deployment there slightly -- here's an article about that issue being dealt with in 2003.

http://www.atmmarketplace.com/article/135818/ATM-cash-recycling-clears-regulatory-hurdles

ETA: Wolman, in _The End of Money_, talks about more and more countries thinking about or actually getting rid of sovereign currency, either by just allowing the dollar to circulate freely or by joining a currency union or whatever. He also thinks that cash may or may not ever go away, but will likely become increasingly used for low-value transactions and otherwise marginalized. If you put those two trends together, along with the popularity of the Euro and the US dollar as a store of value, it would seem to imply that at some point, only one or two physical currencies will be left, not because they "won" in a competition, but because everyone else decided they'd quit a losing game.
Tags: our future economy today
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