👨🏿‍🚀TechCabal Daily – Airtel takes aim at M-Pesa

Years ago, automated teller machines (ATMs) were once trusty pit stops on life’s highway, always there when people needed to get cash. Sadly, they could soon become relics of a banking age that prioritised bringing the user to the bank. As the digital age begins to grow on us, the new normal is bringing the bank to the user, which created the mismatch between ATMs and the 

Four out of five major South African commercial banks—Absa, FNB, Nedbank, and Standard Bank which have a cumulative total of R 7.23 trillion ($394 billion) in total assets—have reduced the number of their ATMs across the country, according to their reports. In H1 2024, these four banks closed 233 ATMs, bringing the total between them to 21,044—excluding partner ATMs mounted in retail stores and high-foot-traffic areas which banks typically don’t own or maintain. 

Yet, South Africa’s ATM decline is not an isolated case. For example, Nigeria has 18.94 ATMs per 100,000 adults, while Kenya has 6.83 ATMs for the same adults—far lower than the globally recommended 50. Digital banking, mobile payments, and fintech solutions have reduced the need for physical cash, making ATMs less relevant.

This decline is not only about convenience; it’s also about cost. ATMs are expensive to operate, requiring maintenance, cash replenishment, and security. Banks are cutting back, redirecting resources toward digital infrastructure instead. Mobile banking apps, contactless payments, and mobile wallets are now the primary ways people access their money digitally.

Still, cash is king for transactions in South Africa. According to the South African Reserve Bank’s (SARB) Payments Study Report, cash remains the most frequently used payment method, with 87% of South Africans preferring it for transactions. For those who rely on cash, fewer ATMs could mean longer trips and higher withdrawal fees at third-party machines. 

The withdrawal of banks creates an opportunity for Independent ATM Deployers (IADs) to fill the void. Companies like ATM Solutions, a subsidiary of Paycorp, have deployed over 5,500 ATMs across various industries and locations, including rural areas. While there’s no indication that IADs will slow funding, customer behaviour and the frequent usage of these machines will, to a large extent, dictate their interest.

These developments seen across different African regions lead to a central question: are ATMs dying a slow death, or is the decline exaggerated?