On June 27, the ATM turned 50. Former U.S. Federal Reserve Chairman Paul Volcker once described it as the “only useful innovation in banking.” But today, the cash that ATMs dispense may be on the endangered list.
Cash is being displaced in so many ways that it’s hard to keep track. There are credit cards and electronic payments; apps such as Venmo, PayPal and Square Cash; mobile payments services; cryptocurrencies that operate outside the purview of central banks; and localized offerings such as Kenya’s mPesa, India’s Paytm and Bangladesh’s bKash. These innovations are encouraging cashlessness across communities worldwide.
It’s reasonable to expect cash to follow the path of other goods that have been replaced by digital alternatives, such as photos, music and movies. Will cash — and the ATMs that dispense it — experience a “Blockbuster” moment and disappear from our neighborhoods?
Not so fast. Cash will likely become less popular, thanks to the high cost of using cash and the growing array of alternatives. But I expect it will remain with us forever. The future will be “less cash,” rather than cashless.
