Despite an ongoing war on cash conducted by the major credit and debit card brands, it appears that cash remains in the payment medium of choice for a large number of consumers, especially those who use credit union ATMs.

“Our overall volume [of transactions] has remained flat to a little down, but there has been no big drop off,” reported Jim Hanisch, executive vice president with CO-OP Financial Services, the parent CUSO of the CO-OP Network of surcharge-free ATMs. “But we expect our numbers might be a little different from the overall industry since as credit unions have seen some significant migration from consumers looking for better deals like surcharge-free ATMs,” he added.

Industry experts had predicted that cash would take a hit with consumers as more lost jobs and saw credit lines shrink, but statistics suggest that, overall, consumers are buying less but still using cash for many transactions.

Industry sources suggest several reasons for the persistence of cash. Some consumer reluctance to abandon cash for cards might stem from the increased attention consumer groups and advocates have placed on overdraft fees and debit cards' potential to cause large overdrafts for small purchases. Other organizations, like the ATM Industry Association, cite a lack of consumer confidence in banking and financial institutions as another reason consumers have been more reluctant to put away the greenbacks and pull out the cards.

But Hanisch and other industry experts pointed out that consumers sticking with cash does not mean they will necessarily use ATMs. Point-of-sale terminals have continued to eat into the use of ATMs as surcharging has continued to make ATM use the more expensive cash option for consumers and have continued to make CU ATMs attractive to them as well.

Where the recession has had a more direct impact is on ATM manufacturers. Both the two largest ATM manufacturers, NCR and Diebold, have been suffering though the recession as a good number of independent ATM deployers and financial institutions put off replacing older ATMs or placing the machines at all.

Diebold's fourth quarter and year-end earnings statements admitted that while orders are up from other parts of the world, the market in North America remained “challenging” in 2009. The company announced it was restructuring its North American operations to save money and that it would cut 350 jobs by the middle of February. The company's revenue per share fell 39% in 2009 from a year earlier.

“While I am encouraged by the strong fourth quarter order growth [from other parts of the world],” said Thomas Swidarski, CEO of Diebold. “Our business related to branch bank construction in North America remains especially challenging.”

NCR has not released year-end data from last year overall but announced a fourth-quarter loss. The company reported a fourth-quarter loss of $56 million compared to income of $55 million in the fourth quarter of 2008, the company said, but overall tried to paint a more optimistic picture than did Diebold.

“The economic challenges that 2009 imposed on our business affected our results but did not slow the initiatives we're putting in place to build NCR into an exciting growth company,” said Bill Nuti, chairman/CEO of NCR.

“Despite tough end-market conditions, we also finished 2009 on a solid note, exceeding expectations largely due to improvements in our core industries. Taken together, we believe these accomplishments and our ongoing commitment to investing in innovation put us firmly on the path to produce better results in 2010 and make continued progress toward our long term goals.”

And while some might have supposed that while NCR and Deibold, known for manufacturing through-the-wall and other branch based ATMs would have suffered from the downturn, ATM manufacture Triton which has specialized more in the cash-dispensing sorts of machines may not have had the best year either.

Triton is owned by the Dover Corp., which did not break its year-end data out by individual company, still posted an overall revenue loss for 2009 of almost 28% when compared to 2008. Triton did not return calls for comment on its revenue for 2009.

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