Background & History

Background

ATM Machines

Until around the late 70's only banks had the permission, and the resources, to deploy ATM machines in their branches. Initially not all branches had ATM machines, and it took a few more years until banks started deploying off-branch ATM machines, due to the high demand for cash in certain high traffic locations.

However banks could not keep up with the demand, and consumer lobbies applied pressure on governments, which opened the doors for non-bank ATM machines, deployed by private operators. Those have since been deployed en-mass. This was the beginning of a massive gold rush as a new business category of ATM deployers was created.

An ATM deployer basically sells access to cash. For a fee, you can withdraw cash from your bank account. The job of an ATM deployer or network operator is to physically acquire this cash, load that cash into a network of ATM machines, charge a fee for every transaction, and hope that all fees collectively add up to more than it costs to operate the network. Deployers must also maintain this network of machines, refill cash before it runs out, and keep a delicate balance between revenue and expenses as they grow their network, because large networks of ATM machines require extra teams to maintain the equipment and refill the cash.

One trick pony

The technology in use in ATM machines has improved massively over the years. Screens got larger, cash dispensers became more reliable and more functional with the ability to dispense multiple denominations, and the cost of ATM machines dropped from tens of thousands of dollars to roughly $2500 which is what they cost right now.

Despite all of these advances, ATM machines have remained a one trick pony: They perform a single function, which is to dispense cash from a person's bank account (or from a reloadable debit card, which for all intents and purposes is also a bank account).