"One of the trends I think we are going to continue to see throughout 2009 is a continuing interest in cash," said Jim Park, CEO of Credit Union 24, one of two nationwide credit union-owned ATM networks. "As credit cards get to be less useful or popular for a variety of reasons in the current downturn, people going to need to buy things and cash is the most familiar option."
Park did not estimate that cash would regain ground lost to cards in the last two decades, but he predicted a potential pause in the steady growth of plastic over cash. This, he also predicted, would keep ATMs a significant part of credit union member service, even as another executive forecast that credit unions will work to hold onto their ATMs in 2009.
Mark Smith, a senior manager with Triton Systems, a domestic ATM manufacturer, acknowledged that the firm had seen a slow down in orders and predicted that it could feel the impact of CUs delaying ATM purchases for a time.
"I think we may see some credit unions deciding not to replace an ATM as quickly this year as they might have in previous years," Smith said. But he remained certain that the overall demand for ATMs, both new deployments and replacements, will continue overall, just at a slower pace.
He also noted that one wildcard in the ATM market this year may be the extent to which financial institutions will have to upgrade or replace existing machines to comply with Check 21 regulations. Although they are not scheduled to come into effect until 2011, the regulations mandate that financial institutions with deposit-taking ATMs will have to provide check imaging at their ATMs. What's unclear, Smith said, and other executives agreed, is whether the regulations will mandate that all of a credit union's ATMs will offer the expensive technology or if a credit union might only have to upgrade some machines.
"Nobody really knows yet if the regulations mean that every deposit-taking ATM has to have check imaging hardware or if maybe only one in every location will have to have it to start," Smith said. Since the technology can add tens of thousands of dollars to machine cost, the question of how many machines will need the new technology will likely grow in importance of the course of the year.
Park also had technology on his mind for 2009. The coming year, he explained, might see ATMs finally come into their own as a cross-selling channel. The widespread use of Microsoft Windows technology for ATM platforms has meant expansion of the cross-selling possibilities, apart from the other ATM marketing experiments that have failed in the past.
"It's a given that American consumers have not wanted their ATMs to do anything more for them than give them cash and maybe let them transfer money from account to account," Park said. "But what if a credit union could prequalify a member for a car loan and be able to inform the member about that as he or she is making their ATM transaction?"
Stan Hollen, CEO of CO-OP Network, the largest credit union-owned, surcharge-free ATM network, primarily had the importance of CU ATM networks on his mind for this year. He predicted 2009 would see even more credit unions adopt an ATM network strategy to help them cope with the increased competition from larger banks' ATM fleets.
"Essentially there is no reason anymore for any credit union in the country to have to fear a bank having more ATM access," Hollen said. "I think that is going to become steadily more clear as 2009 gets going."