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The number of ATM cards in circulation grew by 5% in 2011 to reach 112 million. After witnessing strong growth in the past few years, there were minimal increases in the number of ATMs in 2010 and 2011 as the category approached saturation in terms of new ATM locations. The number of ATM transactions fell by 3% in 2011 to total 759 million. Transaction current value fell by 1% in 2011 to reach C$43 billion.
Canadian consumers shifted away from ATM withdrawals as a means to purchase goods and services, instead demonstrating an increasing preference towards debit payments even for small ticket purchases. The constant value of ATM transactions is expected to continue its downward trend over the forecast period, with a CAGR of -4% to total C$35 billion by 2016.
The growth seen in the number of ATM cards in circulation (5% in 2011 to reach 112 million) is largely due to the growth in debit cards which also carry ATM functions. However, the trend in ATM transactions is best characterised by the decline seen in both number of transactions and transaction value, dropping 3% and 1% respectively in 2011. The ability to obtain cashback at an increasing number of point-of-sale terminals has undoubtedly contributed to the decline in ATM use. However, the most significant trend behind the declining use of ATMs is in Canadian consumers' shift towards making purchases directly with their debit card.
It is important to note that it is not just cash withdrawal transactions at ATMs that declined towards the end of the review period. The most often used services offered by bank-owned ABMs, which include deposits, transfers and bill payments, have suffered a similar decline. In fact, while the number of transactions at ATMs declined by 3% in 2011, the number of bill payments and transfers carried out at ATMs dropped by 5% and 7% respectively according to statistics from the Canadian Banker's Association. This phenomenon can be explained by the increased use of banks' online services such as bill payments and transfers, to carry out functions which were previously realised at ATMs.
There was an important change in terms of fraud liability for those using the Visa and MasterCard networks. As of 2010, the cardholder is no longer liable and instead the ATM service provider and processor are held liable if they accept magnetic-stripe cards instead of chip and PIN cards. This has caused some ATM operators to deactivate a network (Visa or MasterCard) to avoid liability of fraud due to non-chip compliance. For its part, the Interac network has stated that magnetic-stripe debit card transactions will no longer be accepted at ABMs from the end of 2012.
After signing agreements in 2010 with UnionPay, a bankcard association in China with more than 2.3 billion cards issued worldwide, and PULSE, the largest ATM/debit networks in the US, the Interac network's international card acceptance service expanded to more than 50% of the Interac network of ABMs. The service provides UnionPay, Diners Club International, Discover and PULSE cardholders the ability to withdraw money from ABMs of participating acquirers in Canada.
The number of ATM cards is expected to grow at a similar rate to the numbers of credit and debit cards, since those cards usually have an ATM function. The number of ATM cards in circulation is predicted to see a volume CAGR of 2% over the forecast period, to reach 124.5 million.
Interac continues to be the sole ATM transactions processing network in Canada. Although both Visa and MasterCard appeared to be moving towards setting up their own networks in Canada, the Government's new Code of Conduct which came into effect in 2010 appears to have put an end to these plans, at least for the time being, as there have been no concrete signs of Visa or MasterCard setting up their own networks in Canada thus far after the introduction of the Code.
The ATM Transactions in Canada report establishes the size and structure of the market for ATMs cards, smart cards, credit cards, debit cards, charge cards, pre-paid cards and store cards. It looks at key players in the market (issuers and operators), number of cards in circulation, numbers transactions and value of transactions. It offers strategic analysis of sector forecasts and trends to watch.
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