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ATM use under pressure from electronic payment methods, but cash 'won't disappear yet'

An array of payment methods is stalling ATM growth, but financial industry researchers say cash is not about to disappear.

The global research director at financial services firm RFi, Alex Boorman, said more people were using internet banking, EFTPOS and card services such as payWave which let consumers tap their card against a payment device.

"Inevitably we are moving toward a time when consumers will use cash less often, [but] I don't think we're heading to a time any time soon where consumers stop using cash entirely," he said.

"Consumers are using ATMs less often and that's because some of those transactions they were previously using cash for they're now using their cards.

"In many instances also consumers are getting cash out when they're making a purchase."

Mr Boorman said he expected banks to reduce their investment in ATMs, but look at keeping those in high-traffic areas.

"I don't think banks will continue to invest in ATM networks the size they are today if consumers are using them less often," he said.

"We'll see banks think again about where they put them. They'll put them in higher traffic areas where there's a greater propensity for use."

He said cash remained useful to many people for small transactions and at retailers which offered no other payment method.

"Many consumers still regard cash as a convenient way to pay," he said.

"[They] might take a certain amount of cash out at the start of the week, and that's how they budget."

Mobiles the next growth area for payments

Mr Boorman said payment via mobile phones would be the next big shift in consumer habits.

"We will inevitably see cards make way for mobile in the not-too-distant future," he said.

Some big retailers are starting to roll out electronic tags customers can stick to their mobile phones so they can use their device to authorise payments.

A futurist with the Centre for Australian Foresight, Marcus Barber, said there were distinct differences between the payment methods preferred by younger and older Australians.

"The older user, who's quite used to going into a bank, they have a preference for face-to-face contact [and] they like the trust element, where they can see someone across the counter," he said.

"For younger people [their view is] 'Yeah I'll just wave my card and get on with life'. So it's two different marketplaces that need to be catered for."

He said parents and teachers needed to focus on helping younger people learn budgeting skills, regardless of whether they used cards and other electronic formats, or cash.

Mr Barber agreed ATM use would keep decreasing and said the machines came with issues such as theft, use of skimming devices, the cost of filling them regularly with cash, and other maintenance concerns.

He said electronic payment methods were a cost issue for retailers, which made some keen to remain cash-only, but he thought that would change over time.

"What you are going to see is the cost of that technology come down [and] the consumers are going to get more and more comfortable with using non-cash methods," he said.