Back to Basics: Re-imagining ATMs for the Digital Identity&Banking Era
How Revolut, AliPay, Binance, and Worldcoin (Could) Lead the Charge in ATM-as-a-Service Innovation
Cash payments rise for first time in the UK in 10 Years — reported on 14 September 2023 by Kevin Peachey, BBC. In 2022, payments made with cash increased for the first time in a decade as consumers contended with rising prices. Many say using cash makes it easier to manage their finances. Amid efforts to budget more effectively, the volume of transactions made with physical cash rose by 7% from 2021, reaching 6.4 billion payments and becoming the second most popular payment method. The Treasury, in August 2023, announced that banks would incur fines if they did not ensure free access to cash withdrawals for consumers and businesses. A forthcoming policy mandates that free cash withdrawals and deposits must be available within a one-mile radius for urban residents and within three miles for those in rural areas.
While enjoying a coffee in Bromley, southeast London, Debbie Clark expressed her preference for cash transactions: “I like to have cash on me because you know what you’ve spent.” Graham Mott from Link, the organization that manages the UK’s cash machine network, noted that many are reverting to using notes and coins in these challenging economic times. “We’re committed to ensuring every high street has access to free cash. When the last machine closes, we replace it, and we’ll continue to do so as long as there’s a need for cash,” he stated. The Post Office network reported the highest number of cash transactions on record between June and August. With the closure of numerous bank branches, many of its counters have become go-to points for those who prefer cash.
ATM-as-a-Service: The Future is Beyond Cash and Banking
Imagine a world where Revolut, AliPay, Binance, and Worldcoin spearhead an ATM-as-a-Service (ATMaaS) revolution, combining traditional ATM functions with the ability to vote in elections and print both bank and ID cards on demand. This concept isn’t just about withdrawing cash; it’s a futuristic take on empowering users with on-the-spot financial services, identity verification, and democratic participation.
Customer Pain Points and Revolutionary Solutions:
- For Banks, Especially Digital Ones: The cost and logistics of card delivery can be a conversion killer. The solution? On-site card printing. Imagine walking up to an ATM and walking away with your new bank card in minutes, not days.
- Verification and Biometrics for Digital ID Services: Setting up high-quality verification infrastructure is costly and complex for individual companies, leading to minimal coverage. Enter Biometrics-as-a-Service: comprehensive infrastructure and API access for seamless identity verification and entry control, catering to airports, hotels, and even cannabis dispensaries.
- Cash vs. Digital Banking: Despite the rise of digital banking, cash transactions remain king, both in volume and growth. Digital banks limit withdrawal options, making cash deposits nearly impossible. The ATMaaS could revolutionize this, providing easy access to free cash transactions and deposits via direct-to-account API-integration.
- Elections: The shift to online has streamlined many processes, but offline elections remain costly due to the logistics of handling physical ballots. The solution? Digital voting on ATM, kiosk, or terminal screens, secured with biometrics to ensure your vote is yours alone.
Imagine deploying a global network of smart ATMs, accessible via APIs for digital banks and e-wallets worldwide. These aren’t your average ATMs. Equipped with document scanning, biometric verification (including facial and fingerprint recognition), and video call capabilities for live verification, they represent a leap into the future of banking and identity services.
These ATMs could print bank and ID cards on the spot, facilitated by the same technology used to produce Aadhaar cards, state IDs, and more. They could also serve as polling stations during elections, incorporating biometric verification to authenticate voters.
The rise of cryptocurrency ATMs underscores the evolving financial landscape, offering a glimpse into the potential of a more integrated ATM service. But why stop there? Imagine ATM booths designed by Worldcoin with the aesthetic appeal of Apple products, offering a sleek interface for biometric verification alongside traditional ATM services.
The proposal for an ATMaaS network is not just about providing financial services; it’s about creating a seamless, integrated experience for verification, banking, and even democratic participation. This vision aligns with the needs of companies like Revolut, Binance, and Worldcoin, potentially transforming the way we think about ATMs and their role in our digital and physical lives.
In a world increasingly dominated by digital transactions, the ATM market finds itself at a crossroads, presenting a fascinating dichotomy of growth and decline. Despite the booming adoption of card and digital transactions, cash remains a stalwart in the global economy, ensuring ATMs hold their ground, albeit with evolving roles and technologies.
Growth vs. Decline: Today, there are over 2 million ATMs across the globe
The world’s first publicly accessible ATM was installed in 1967 in London by the British bank Barclays. The earliest ATMs accepted not plastic cards but vouchers (or checks, IOUs), and although the device was relatively simple overall, it has not undergone many changes since its inception. The dynamics of the number of ATMs in the world per 100,000 adults, units (according to World Bank data): 2006–18.95, and in 2018–41.6.
Globally, the ATM market has been experiencing a nuanced shift. In emerging economies, where banking infrastructure is still being developed and cash is king, ATMs continue to see growth. Countries like India and Indonesia are witnessing an increase in ATM installations to cater to a growing banked population and the need for financial inclusion. Here, ATMs are not just cash dispensers but also act as points for basic banking services, from deposits to fund transfers.
Conversely, in developed economies, the narrative diverges significantly. The U.S., U.K., and parts of Europe are seeing a gradual decline in ATM numbers. This trend is propelled by the accelerated adoption of digital payment methods, especially in the wake of COVID-19, which has pushed more consumers towards contactless payments and online banking. The decline is not precipitous but signifies a shift towards digital-first banking experiences.
While digital transactions are on the rise, cash transactions hold a resilient stance globally. The Federal Reserve’s 2019 report highlighted that cash remains the most frequently used payment method, particularly for transactions under $10. Similarly, the World Cash Report 2018 by G4S noted that cash circulation relative to GDP is rising in most countries, including those with a strong push towards cashless societies.
Consider GoJek in Indonesia, which has revolutionized the ATM market by integrating financial transactions into its ride-hailing service. (Or imagine ATM booths built into Arrival electric buses, combining transportation with financial services!)
The resilience of cash underscores a dual narrative where, despite the growth of digital and card transactions, ATMs continue to play a crucial role in ensuring access to cash, especially in underbanked areas or during times of crisis.
Main Players, Challenges and Opportunities
Leading players in the ATM market include Diebold Nixdorf, NCR Corporation, and Hyosung, among others. Innovations are also coming from fintechs and banks, with features like cardless withdrawals, cryptocurrency transactions, and mobile app integrations, highlighting the ATM’s transition from a mere cash dispenser to a comprehensive financial service point.
The ATM industry faces its set of challenges, from the high cost of maintaining and upgrading machines to the increasing threat of cyber attacks. Yet, these challenges present opportunities for innovation. Additionally, the integration of ATMs with digital banking platforms offers a seamless omnichannel banking experience, bridging the gap between physical and digital financial services.
In Indonesia, the ATM market got disrupted by the local “Uber,” GoJek: you choose in the app how much money you want to withdraw or deposit, they’re integrated with the major banks, and while you’re riding their scooter or taxi, you hand over/get the money. In this context, it could be cool to play around with, for example, an ATM (and voting machine) built into an Arrival electric bus.
Looking Ahead: On The Way to crypto ATMs
The number of cryptocurrency ATMs worldwide has decreased to 33,740 units. At the beginning of 2023, there were 10% more — 37,591, according to Coin ATM Radar data.
The USA remains the leader in the number of installed bitcoin ATMs — 28,562 (84.6%). Canada ranks second with 2,589 units or 7.7% of the total. Australia is in third place with 362 (1%). In total, they are installed in 70 countries around the world. The United Kingdom is the leader in Europe.
Among manufacturers, General Bytes leads with 9,642 crypto ATMs (28.6%). Followed by BitAccess (6,808, 20.2%) and Genesis Coin (5,737, 17%). In 2020, Genesis Coin and General Bytes had market shares of 36% and 29.5% respectively.
The leading bitcoin ATM operator is Bitcoin Depot — the firm manages 6,251 devices or 18.5% of the market share. Coin Cloud (4,269, 12.6%) and CoinFlip (3,939, 11.7%) also made it to the top 3. In 2020, the trio of leaders — Coinflip, Bitcoin Depot, and CoinCloud — each had almost 10% of the total.
Three years earlier, in 2020, the number of bitcoin ATMs in the world increased by 83% — the number of devices reached 11,689 units by the end of the year, while on January 1, 2020, there were only 6,372 pieces. Then, new bitcoin ATMs were being installed at a rate of more than 24 units per day. The market leaders have not changed over three years. The top 10 leading operators managed more than half of the operating bitcoin ATMs (54.5%).
In February 2023, bitcoin ATM operator Coin Cloud (Cash Cloud) filed for bankruptcy, the company that runs Coin Cloud digital currency ATMs in Brazil and the United States. In a blog post from January 2022, Coin Cloud claimed to have more than 1,100 ATMs and to be “at a key period in the company’s hyper-growth.” On its website, Coin Cloud stated that it operates over 5,000 ATMs that support more than 40 cryptos. When Coin Cloud had 4,826 ATMs, almost all of which were in the United States, it was the second-largest ATM provider in the world. An unknown hacker group has claimed to have stolen 70,000 selfies and confidential data of 300,000 customers of the Bitcoin ATM service Coin Cloud. This was brought to attention by the VX-underground community. The hackers’ messages contain edited images, presumably of customers’ selfies and their personal information, including names, addresses, dates of birth, occupations, phone numbers, and social security numbers.
That same month, the West Yorkshire Police and the UK Financial Conduct Authority conducted raids against illegal bitcoin ATMs in the Leeds area. Checks began in London in March.
In 2023, as part of El Salvador’s initiative to establish Bitcoin as legal tender, President Nayib Bukele decided to install over 200 crypto ATMs across the country. While this move made El Salvador the third-largest crypto ATM hub at the time after the United States and Canada in September 2021, Spain and Australia overtook the Central American country’s ATM count in 2022. On October 2022, Cointelegraph reported that Spain became the third-largest crypto ATM hub after installing 215 crypto ATMs. El Salvador’s position as the fourth-largest crypto ATM hub was short-lived as Australia stepped up its game over the following months. In 2022, Australia deployed 99 crypto ATMs, and as of Jan. 1, 2023, Australia recorded 219 active crypto ATMs. Australia represents 0.6% of global crypto ATM installations and, at this rate, is well-positioned to take over Asia’s crypto ATM numbers, which stand at 312 ATMs.
In 2022, NCR Corporation planned to purchase Bitcoin ATM company LibertyX, which currently services 20,000 retail stores in the U.S. with 9,500 crypto ATMs. LibertyX is the company that launched one of the first retail Bitcoin ATMs.
Nothing Phone: A Biometric Revolut-ion
The potential collaboration between Nothing, a forward-thinking British tech brand known for its innovative design, and fintech giants Revolut and Worldcoin, could redefine the intersection of technology, finance, and security. Imagine a device that’s not just smart, but also intrinsically secure, thanks to its biometric-first approach: introducing the concept of a crypto-phone, which could be the next big leap in digital identity and financial transactions.
Current smartphones offer basic biometric security features like fingerprint and facial recognition, sufficient for unlocking your phone or making payments. However, these features fall short of the more rigorous biometric requirements needed for document verification or passport control. This gap in the market presents an opportunity for Nothing to introduce a biometric-first phone, raising the bar for security and usability. Such a device, packaged with state-of-the-art biometric devices as part of the “box,” could revolutionize how we think about smartphone security.
Nothing, with its rebellious and counter-culture ethos, has always pushed the boundaries of what’s expected. Surprisingly, it hasn’t yet ventured into creating its own crypto-wallet or digital ID solutions, which would seamlessly align with its brand identity. A collaboration with Revolut and/or Worldcoin could bring these ideas to life, integrating both software (soft wallet) and hardware (cold wallet) solutions into the Nothing phone ecosystem.
Customization at the OS Level: Unlike iOS, Android allows for the creation and implementation of custom “launchers,” enabling brands to tailor the Android OS to their unique style and functionality. This opens doors for Nothing to offer a customized experience right out of the box, preloaded with essential apps for seamless integration with Revolut’s financial services and Worldcoin’s digital identity solutions.
Packaging Innovation: A Complete Ecosystem in a Box. The idea extends beyond just the phone itself: the packaging could include a reader for card acceptance, echoing the style of Revolut/Worldcoin, eliminating the need for separate acquisitions and offering a comprehensive package of services and devices from the get-go. This would not only enhance user experience but also set a new standard for what consumers can expect from their smartphone package.
The Collaboration: Imagine unboxing your new Nothing phone, where alongside the sleek device, you find a biometric scanner and a card reader, ready to dive into the world of secure digital transactions and identity verification. This isn’t just a phone; it’s a gateway to a new era of digital interaction, where security, finance, and identity converge in the palm of your hand.
As we look to the future, collaborations like this could herald a new wave of technology that’s secure, user-focused, and integrated with our digital lives more seamlessly than ever before. With Nothing’s design prowess, Revolut’s fintech expertise, and Worldcoin’s vision for a secure digital identity, the biometric-first crypto-phone could be more than just a concept; it could be the blueprint for the next generation of mobile devices.
