China ATM numbers shrink as more opt for cashless payments
China’s blistering growth in digital payments could gradually make the ubiquitous ATMs or “automated teller machines” irrelevant in the second largest economy in the world
China’s blistering growth in digital payments could gradually make the ubiquitous ATMs or “automated teller machines” irrelevant in the second largest economy in the world.
As of the end of 2020, the number of ATM machines in China was 1.0139 million units, a decrease of 83,900 from the end of 2019, new data showed, adding that the number of ATMs per 10,000 people nationwide was 7.24, a year-on-year decrease of 7.95%.
The decline in the number of ATM units in China began in 2018 but the rate rapidly increased last year. The fall in ATM number has been driven by businesses switching over to accepting online payment spurred by Covid-19 pandemic while vendors and fruit stores have increased their online and offline payment integration.
In comparison, the total number of ATMs in India stood at 234,244 by the end of September 2020, marginally down from 234,357 in March 2020, according to the Reserve Bank of India data, quoted by fortuneindia.com in January this year.
While industry reports say the first ATM was unveiled in China in 1985, the Bank of China, one of the country’s leading banks, says it issued the first ATM card in 1987.
China’s push towards the use of digital yuan, its own digital currency, could further shrink those numbers in the coming years.
Data from the People’s Bank of China (PBOC), quoted by thepaper.cn, showed a sharp increase in non-cash payments in 2020. “According to data released by the central bank, in 2020, banks across the country handled a total of 354.621 billion non-cash payment services,” the article said.
The amount of money involved in non-cash payments, including commercial papers, bank cards and online payment vehicles, totaled 4013.01 trillion yuan (about $613.84 trillion) last year, up 6.18% year-on-year, according to the PBOC.
The country had 854 million online payment users as of December last year, an increase of more than 86 million since March 2020, said a report from the China Internet Network Information Centre.
Results of a financial survey carried out last year but released in February showed that mobile payment penetration continues to rise in China as more consumers go digital.
“In 2020, 98% of the 65,000 surveyed listed mobile payments as their most commonly used channel, up 5 percentage points from the previous year,” according to the report jointly released by China UnionPay, a domestic financial institution, and 17 commercial banks and payment institutions.
“Affected by the epidemic, more offline payment scenarios have been migrating online…Meanwhile, small physical stores such as vendors and fruit stores have increased their online and offline payment integration, winning them customers during the epidemic,” the official news agency, Xinhua, reported, quoting from the survey.
ATM manufacturers are adapting to the change and moving into making VTMs (virtual teller machines) and STM (smart teller machines.)
However, ATM machines will not disappear in the immediate future, explained Yu Baicheng, the dean of Zero One Research Institute, a Beijing-based think-tank focused on finance. “Starting in 2015 and 2016, the transaction volume of bank deposits and withdrawals began to decline. Affected by this, banks’ demand for traditional ATM machines has declined, and some ATM suppliers have even withdrawn from the market,” Yu was quoted as saying by thepaper.cn.
“However, ATM machines will not completely disappear, China’s regional development is quite different, and mobile payment cannot completely replace cash transactions,” Yu added.