The Future of EU ATM Markets. Impacts of digitalisation and pricing policies on business models. CEPS Research Report, October 2018

de Groen , Willem Pieter and Kilhoffer , Zachary and Musmeci , Roberto (2018) The Future of EU ATM Markets. Impacts of digitalisation and pricing policies on business models. CEPS Research Report, October 2018. UNSPECIFIED.

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Abstract

ATMs constitute a critical component in today’s infrastructure for facilitating cash payments. However, ongoing digitalisation (cashless payments, e-commerce and online banking) is challenging the role of ATMs and putting pressure on the cash infrastructure in the EU. The shift from cash to cashless payments reduces the need for cash withdrawals and the rise of online banking challenges the bank branch as the traditionally most prevalent location for ATMs. Moreover, the introduction of pricing policies might also change the dynamics in EU ATM markets. Transparency and price caps on the so-called dynamic currency conversion (DCC) as well as potential reductions in interchange fees will put pressure on the revenues of certain ATMs. Against this background, this report assesses the sensitivity of EU ATM markets to ongoing digitalisation and pricing policies. The impact of these developments is assessed across business models in Belgium, France, Germany, Greece, Poland, Portugal, Spain and Sweden, which are representative of the ATM markets in all EU member states. Location characteristics are determined and costs and revenues estimated for the 146,821 ATM locations across these eight EU member states in mid-2018.

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