High Five for £5 only cash machines

With only £1.3 billion worth of £5 notes in circulation in 2009, far fewer than £10 and £20 denominations, the Bank of England has been trying to raise this figure in recent years. One way of doing so has been to increase the number of ATMs that stock five pound notes.

The ATM operator ‘Bank Machine’ has run a successful pilot scheme in London for the last two years which trialled ATMs that only dispense five pound notes. As a result, it announced yesterday it will be installing 21 more machines that offer this service. As Andrew Bailey, chief cashier at the Bank of England, has said, the ATM “is the front line of cash provision to the public" and this has proved one of the most effective ways of increasing note circulation.

Though Bank Machine usually charges for its services, the special five pound note dispensing ATMs are free to use and will be particularly beneficial to consumers in the current climate, where smaller denominations of cash will help people to budget more effectively.

This move may well further increase consumer use of ATMs and it provides those banks that are able to roll out this service with an opportunity to develop brand reputation and strengthen relationships with their customers – for example HSBC was asked by the B of E to run a pilot service of 100 ‘five pound ATMs’ last year. Receiving a fiver at the ATM would be a very welcome surprise for most and possibly help to drive repeat visits to that particular ATM. The question is, will more banks and ATM providers follow suit?

Ian Kerr

Santander offer to buy RBS branches

As the industry expected, Santander’s offer to buy RBS branches has gone through. With the ATM being one of the most visible channels for communicating brand changes to customers, it will be interesting to see whether and how the bank chooses to utilise its most frequent customer touch point to highlight the boost to its network.

Ian Kerr

The ATM, from invention to now

John Shepherd-Barron, who holds the title as the inventor of the world’s first hole-in-the-wall cash dispenser, sadly passed away last month.

John Shepherd Barron’s first ATM was installed in 1967 in Barclays bank in London. The original ATM dispensed a maximum of £10 per withdrawal which was activated using a carbon implanted cheque, as the plastic card was yet to be invented.

The invention of the ATM marked the beginning of customer self service in the retail banking industry and has since become synonymous with banking in the customer consciousness. The machine is now as much part of the consumer experience as the high street bank itself and has developed to become the most utilised customer touch-point in retail banking all over the world.

The First ATM at Barclays Bank

While new customer channels such as the internet and mobile phone have considerably broadened the scope of self service banking, the ATM has held its position as a dominant point of contact and favourite of the consumer.

It is estimated that there are currently over 1.8 million ATMs operating globally which can dispense up to £500 per withdrawal and allow customers to access their money regardless of where they are in the world.

Since Barron’s invention, the ATM has moved beyond being a simple cash dispensing machine. The last ten years in particular have seen a number of changes to the ATM including a new operating system and the introduction of EMV smart cards, allowing customers to access more reliable and secure ATMs with more sophisticated services. For example, many customers now top-up mobile phone credit at the ATM. With stringent testing and monitoring in place, these improvements can also increase uptime of ATMs and decrease the risk of fraud through the channel.

John Shepard Barron’s invention is now forty three years old. Since then, the ground work has been laid for the ongoing development of one of the most relied upon pieces of retail banking technology that continues to evolve and progress today.

Ian Kerr