In the opinion of the Bundesbank, the dense network of ATMs in Germany should not be thinned out unnecessarily. “This could be the start of a downward spiral in which poorer cash supply leads to lower cash usage and vice versa,” the Bundesbank warned in its December monthly report published today.
“This would primarily affect all citizens who would like to continue using cash or who are dependent on cash.”
There are currently around 55,000 ATMs in Germany, i.e. around 70 machines per 100,000 inhabitants. According to the Bundesbank, Germany is in the top quarter of Europe as a whole. In a representative survey conducted by the Bundesbank at the end of 2021, 96 percent of those surveyed stated that they withdraw cash from ATMs and make an average of 81 percent of their withdrawals there. “This means that the ATM is still by far the most important withdrawal point for cash supplies,” the Bundesbank states.
The vast majority (94 percent) say the time it takes to get to an ATM or bank teller to get cash is very easy or fairly easy. “There is no evidence of an undersupply, especially in rural areas,” writes the Bundesbank.
The machines are expensive to operate
However, many respondents stated that they increasingly wanted to do without cash should the supply situation deteriorate significantly. Operating, securing and filling ATMs incurs costs for value service providers and commercial banks.
It is becoming increasingly common that machines that have been blown up by criminals are not renewed. ATMs that are used less frequently could also be taken offline for cost reasons. The Bundesbank warns: “Maintaining a good cash infrastructure is all the more important as the system carries the risk of a cost-driven downward spiral.”
According to the central bank, other ways are not a complete substitute: “Even if more and more shops are now offering cash withdrawals at the checkout, this type of cash supply is not a full alternative to bank-operated ATMs, but rather a supplement.” The withdrawal at the cash register usually requires the purchase of goods in the respective shop and is only possible during opening hours. In addition, the cash that is paid out is not checked for authenticity beforehand by machine, as is the case with notes that are used to fill ATMs.
Problems with card payments again and again
From the Bundesbank’s point of view, another argument for a dense network of ATMs was the temporary disruption in card payments in retail in May of this year. As a result of the software error in card terminals, there was an increased demand for cash in Germany at the time, according to the Bundesbank. Around 75 percent of those affected paid for their purchases with bills and coins instead of the planned card.
“This underscores the importance of a nationwide, bank-operated cash infrastructure in the event of a crisis or disruption,” says the Bundesbank. “Without the close-meshed network of ATMs and bank branches here, the disruption to retail and consumers might have been significantly greater.”
