Frost & Sullivan point to significant growth in the ATM industry

Frost & Sullivan recently published a report on the impact of EMV compliance on the ATM market. The report estimates that revenue generated from the ATM will exceed $4.9billion in 2015, an increase of $0.6 billion compared to 2009. The migration to EMV around the world is largely due to the focus on fraud reduction and payment security, but a happy side-effect of this investment is the opportunity to innovate at the ATM channel and generate ROI through the introduction of smart chip technology.

While adoption of EMV has been widespread, many countries have been reluctant to invest and, as Frost and Sullivan reports, this is primarily a result of tighter budgets caused by the financial crisis. However, as the above revenue figure shows, investment in EMV can be recouped not only through the long term cost savings associated with fraud reduction but also the use of smart chip technology to provide innovative new services such as mobile top up and personalised marketing at the ATM.

Whilst this is good news for banks and the ATM industry as a whole, it is important to bear in mind that EMV significantly increases the technical complexity of the ATM channel. Consequently, in order for banks to ensure that investment in their ATM network does generate ROI, they must first make sure that the basics, such as automated testing, are in place. Without this, ATMs are likely to experience high levels of downtime which can negatively impact brand reputation and customer loyalty and, ultimately, a bank’s bottom-line.

While Frost & Sullivan’s findings highlight the potential for EMV to increase both innovation and profit, this cannot come at the expense of ATM uptime if banks want to achieve true ROI from the channel.

Ian Kerr