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Will ATMs disappear in the era of digital renminbi?



After reaching the historical peak in the third quarter of 2018, the total number of domestic ATMs has shown an overall downward trend.

As an offline service channel, ATM machines have long played an effective supplementary role to bank outlets. However, with the vigorous development of the Internet and information technology and profound changes in customer behavior, the functions and services of ATM machines are facing a huge impact.

Especially after the outbreak of the new crown pneumonia epidemic, the rise of contactless banking services has further exacerbated the decline of bank ATM machines. In addition, the pace of digital renminbi is getting closer and closer, which will also greatly affect the existing financial field structure.

Will the ATMs on the streets gradually disappear?

ATM Micro in the Digital Age

"ATM machines used to be the biggest application of commercial banks, but with the development of mobile payment, the role of traditional ATM machines has become less and less. Especially after the outbreak, in order to prevent human-to-human transmission, mobile payment and contactless payment have become more popular." Meng Xiaofeng, a think tank expert of Zhejiang Blockchain Technology Application Association and global partner of 33 complex US chain reform, told Lianxin.

According to public data, during the "May 1st" holiday this year, the total transaction amount of UnionPay and Internet Union in five days was 6.97 trillion yuan. Among them, the five-day transaction amount of UnionPay was 1.91 trillion yuan, the highest in the same period of May Day in previous years, an increase of 5.5% over the same period last year.

There have been more than 1.32 million digital renminbi pilot scenarios, and the cumulative transaction amount as of the end of June this year is 34.5 billion yuan: Recently, at the media briefing of the white paper on the development of China's digital renminbi, Fan Yifei, deputy governor of the People's Bank of China, introduced the latest developments in the digital renminbi pilot program. Achievements said: "As of June 30, the number of whitelisted users invited to the digital RMB pilot has exceeded 10 million, 20.87 million personal wallets have been opened, 3.51 million public wallets have been opened, and the cumulative number of transactions has reached 70.75 million with an amount of 34.5 billion yuan. yuan.” The application field of digital renminbi is gradually expanding. At present, there are more than 1.32 million digital renminbi pilot scenarios, both online and offline, covering wholesale and retail, catering, cultural tourism, education and medical care, public transportation, government payment, tax collection, subsidy distribution and other fields. (People's Daily Overseas Edition) [2021/8/11 1:47:51]

The NetsUnion platform processed a total of 8.532 billion cross-institution online payment transactions involving funds, with an amount of 5.06 trillion yuan. Compared with the same period last year and the same period of the previous year, the average number of daily transactions increased by 26.07% and 94.85%, respectively, and the average daily transaction amount increased by 46.48%. and 87.96%.

With the development of information technology and mobile Internet, great changes have taken place in payment methods, people's demand for cash service system has greatly decreased, and the number of ATM machines has shown a downward trend as a whole.

Li Lihui, former president of the Bank of China: Make the digital renminbi the best central bank digital currency in the world: Li Lihui, the former president of the Bank of China, said at the first "2021 West Bund Fintech Frontier Forum" a few days ago, "We should make the digital renminbi the best in the world." The best central bank digital currency, on the one hand, ensures the large-scale and reliable application of digital renminbi in high-concurrency markets; Actively participate in and actively strive for the right to speak in the construction of global digital financial systems and rules." (China Securities Journal) [2021/5/23 22:35:28]

According to the report on the overall operation of the payment system previously released by the central bank, in 2015, when my country's ATM demand was at its peak, the number of new ATMs reached 252,000, but fell rapidly to 58,000 and 36,000 in 2016 and 2017; from 2018Q1, The central bank has adjusted the statistical caliber of the number of ATMs. In addition to the original self-service deposit machines, self-service teller machines, deposit and withdrawal machines, self-service payment terminals and other equipment, new statistics have been added for self-service terminals, visual counters (VTM), smart Counter (STM) and other new terminal equipment, so the total number of ATMs under the central bank's statistical caliber has increased significantly. However, it is worth noting that the total number of ATMs in China has shown an overall decline after reaching its historical peak in 2018Q3, and the number of ATMs corresponding to every 10,000 people has continued to decline since 2018Q4.

Digital RMB public beta upgrade digital currency sector strengthened: On May 10, the Flush digital currency sector rose 4.38%, and individual stocks in the sector generally rose. *ST Julong, Qitian Technology, Hengbao, Chutianlong, Cuiwei shares daily limit, Netac Technology rose more than 13%, and New Cape rose more than 19%. [2021/5/11 21:46:57]

On the other hand, banks follow the development trend, and at the same time, in order to reduce operating costs, they reduce the number of ATMs and self-service banks to reduce operating costs.

According to 01 Think Tank’s statistics of 9 banks including Gongnong Zhongjian Jiaotong Post, some banks have been reducing the number of ATMs as early as 2014.

Among them, China CITIC Bank has reduced the most. From 2014 to June 2020, ATMs have been reduced from 11,128 to 6,058, a reduction of 46%.

The Agricultural Bank of China has reduced the number of ATMs the most. From 2016 to June 2020, ATMs have been reduced from 130,000 to 78,000, a decrease of more than 50,000.

Recently, the People's Bank of China released data on the overall operation of the payment system in 2020, showing that the number of ATMs per 10,000 people across the country was 7.24, a year-on-year decrease of 7.95%.

In stark contrast, the volume of mobile payment business keeps growing. In 2020, banks will handle a total of 235.225 billion electronic payment transactions with an amount of 2711.81 trillion yuan. Non-bank payment institutions handled 827.297 billion online payment transactions, with an amount of 294.56 trillion yuan, a year-on-year increase of 14.90% and 17.88% respectively.

The National Development and Reform Commission and other ministries: Accelerate the pilot promotion of digital renminbi: The National Development and Reform Commission and other ministries and commissions stated that they will speed up the pilot promotion of digital renminbi, give priority to some cities with active-zce new consumption for pilot projects, and focus on improving financial operation efficiency and reducing financial transaction costs. (Wall Street Insights) [2021/3/25 19:16:50]

Survive the manufacturer

Undoubtedly, ATM machine manufacturers are the most affected by the decrease in ATM machine market demand.

A fund manager of a brokerage said: "In the past, the gross profit margin of ATM manufacturing was relatively high, about 50 to 60 percent as a whole, but now it continues to decline. Twenty years ago, an imported ATM machine cost 40 to 50 percent. Now a domestically produced ATM machine is less than 50,000 yuan, and the decline is relatively obvious.”

"ATM machine manufacturers have not been optimistic about their performance and profits in recent years." Meng Xiaofeng told Lianxin.

In the development of financial technology, the state has continuously strengthened its support for independent, safe and controllable technology. Domestic ATM manufacturers dominate the domestic market. The main equipment suppliers are: Yuyin, Guangdian Express, Hengyin Finance, Yihua, China Banknote Coburg, Eastern Communications, CLP, etc. Among them, the listed company GRG Express is the largest ATM machine supplier in my country. It has ranked first in China's ATM market share for 11 consecutive years and has deployed more than 300,000 ATM machines globally.

Small-scale testing of digital renminbi in Xiongan, Starbucks and others have not yet connected: According to news on October 14, the digital renminbi was officially unveiled in Shenzhen recently. In addition to Shenzhen, Suzhou, Xiongan, and Chengdu are also pilot areas for digital renminbi. Through on-the-spot investigations in Xiong’an New District, it was found that, on the whole, the digital renminbi of Xiong’an is still being tested on a small scale and in a small range. expect. At the same time, the Xiongan digital renminbi pilot is mainly based on the offline promotion of banks. It has been rumored that foreign-funded enterprises such as Starbucks do not support digital renminbi payments for the time being, but the scope of the test is still mainly in the catering industry. (21st Century Business Herald) [2020/10/14]

A number of ATM manufacturers believe that the current financial self-service equipment industry has entered the stage of accelerated "reshuffle", and the transformation requires more technology accumulation, which will now become a watershed in the development of the industry.

Taking Yuyin Co., Ltd. as an example, the company's main product is ATM self-service equipment, which is used by banking financial institutions to provide self-service financial services to their customers. The main business consists of ATM product sales, ATM operation services and ATM technical services.

In the first quarter of 2021, Yuyin Co., Ltd. had operating income of 20.828 million yuan, a year-on-year decrease of 56.86%, and realized a net loss of 34.525 million yuan attributable to shareholders of listed companies, a loss of 46.759 million yuan in the same period last year. According to the company, the main reason for the decline in operating income is that due to the impact of market demand, the company's ATM sales revenue and ATM technical service revenue have decreased year-on-year.

Regarding the future development of the company, some investors are worried that the research and development and implementation of digital renminbi are reducing the demand for cash, which means that the demand for ATMs will become lower and lower. So, is it necessary for ATM manufacturers to exist in the future?

Yuyin Co., Ltd. said that it actively pays attention to the progress of the central bank's digital currency, carries out application research on digital currency transaction processing on smart devices, and research and development of digital currency wallet-related technologies, which have not yet been commercialized.

"Most ATM suppliers are actively seeking transformation due to the intelligent upgrading and transformation of mobile payment and bank outlets." According to the observation of Ren Wansheng, an analyst at Zero One Think Tank, the industry has seen a situation in which the strong remain strong and the weak leave the market, such as Chentong Intelligent, Digital China and Xindatong chose to withdraw from the market; ATM suppliers represented by GRG Express, Hengyin Technology, and Yihua focused on the intelligent upgrade and transformation of banks, increased R&D investment, and explored artificial intelligence, big data, cloud computing and smart The possibility of equipment integration extends the product chain from "ATM" to "Smart Outlets", and develops from low-end business to high-end, complex and core business.

Intelligent transformation seeks a way out

"With the popularization of digital renminbi and smart outlets, software and hardware companies in the ATM-related industry chain must actively combine AI, blockchain and other technology research and development to have a future. It may not be enough time, energy and cost to invest in research and development by yourself. You can find well-known companies in the industry. Enterprise cooperation.” Meng Xiaofeng told Lianxin.

Contrary to people's general perception, ATM is not born just to deal with "money". The correct translation of ATM is Auto-Teller Machine, which can replace tellers to do many services. Moreover, this is not limited to bank counter services, but can be extended to intelligent counter services in any industry.

At present, it appears that the demand for ATMs that only do cash deposits and withdrawals is decreasing, but the demand for ATMs that can handle all personal banking and business banking services is increasing. Many commercial banks in my country are actively upgrading their outlets and stepping up the construction of smart counters.

According to the "2019 China Banking Service Report" released by the China Banking Association, as of the end of 2019, the number of banking outlets reached 228,000. From 2016 to 2019, nearly 3.5 outlets have completed renovations, and 190,000 outlets are facing upgrades. , each outlet is predicted based on a renovation fee of 1 million yuan, and ATM suppliers will usher in a market worth hundreds of billions.

In addition to this, banks are continuously reducing the number of self-service banking distributions. In the future, with the development of digital renminbi and mobile payment, self-service banks may disappear. For example, China Construction Bank and Industrial and Commercial Bank of China are reducing the number of self-service banks; and the number of ATM equipment will likely remain between 2-3 per outlet , the number of outlets has been stable at around 220,000 in recent years, so the number of ATMs will likely remain between 400,000 and 700,000 in the future.

It is worth noting that the emergence of the digital renminbi has created new demands while further squeezing the living space of ATMs.

With the maturity of digital renminbi technology and the improvement of the payment and circulation environment, the bank IT system will be the vanguard of various technologies. In terms of payment scenarios, ATM and POS machine upgrades and supporting windows will gradually open. Among them, the mutual exchange between digital renminbi and cash is one of the basic functions of digital renminbi circulation in the future. As a cash flow machine, ATM must guarantee its right to free exchange. Therefore, the upgrade of ATM software and hardware systems is extremely certain.

On February 6, 2021, the Dongcheng District People's Government of Beijing hosted the "Digital Wangfujing, Ice and Snow Shopping Festival" digital renminbi pilot event centering on the entire consumption scene of the Winter Olympics. Some ATMs of ICBC already support digital renminbi and cash two-way exchange.

From April 25th to 29th, the 4th Digital China Construction Achievement Exhibition was held in Fuzhou. Under the leadership of the Digital Currency Research Institute of the People's Bank of China, a digital RMB exhibition area was specially opened at the Achievement Exhibition, fully displaying the digital RMB various exchange processes. At the booth, Bank of China displayed the self-service teller machine of "direct exchange of foreign currency into digital renminbi physical card", which will facilitate the consumption of foreigners after they come to China in the future.

According to previous news, the Agricultural Bank of China has taken the lead in launching the digital renminbi cash deposit and withdrawal function of ATM machines. Based on the digital renminbi deposit and withdrawal on the ATM machine, it can realize the non-inductive exchange of digital renminbi and cash, and it has already been piloted in some branches in Shenzhen.


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