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US ATM card market led by Bank of America and JPMorgan

Industry Sector

Finance and Banking

Published

20 December 2012

Author

Mike King

Type of News

Market

The US ATM card market is one of the most mature markets on the globe, and represented the second largest region within the total worldwide ATM market in 2011.

An ATM transaction typically involves withdrawing cash from an ATM machine. The consumer presents an ATM card, which is issued by the bank holding his or her checking account, at an ATM terminal, which may or may not be owned by the same bank.

The consumer enters a personal identification number (PIN) to verify identity, the checking account is checked for adequate funds, and if everything is satisfactory, cash is issued. All of this is routed across one or more ATM networks.

The banks that are the largest lenders by assets in the US also operate the largest branded ATM networks. In 2012, as Bank of America has downsized its ATM network to control costs, competitors such as JPMorgan Chase & Co have seen an opportunity to grab market share.

As the drive for convenience continues and consumers find less reason to visit banks' retail branches, many operators, rather than operating machines that just dispense cash, are choosing to invest in more advanced machines that provide enhanced services such as cheque depositing and that are located in more convenient or accessible locations.US ATM card market

ATMs can generally accept most bank cards, and are primarily bank property, with a small number of private ATMs. However, consumers must be aware of the machines they use, as ATMs will charge a fee if the card used is not the same as the ATM's bank, and the issuing card of the consumer will also charge the consumer for using an ATM out-of-network so the consumer incurs two separate fees.

The number of ATMs in the US has shown steady growth as financial institutions compete to provide a convenient network for customers. By increasing the financial services available at ATMs, banks are able to mitigate some of the customer attrition from reduced retail branches. Select ATMs allow real time cheque deposits, balance transfers, and bill payments.

Transactions within the US ATM card market is expected to post a compound annual growth rate (CAGR) of 3% between 2012 and 2017, higher than the projected CAGR of 2% for cash consumer payments over the same period.

Increasingly, ATMs can serve as more than just cash dispensers, so consumers looking for convenience and all-hours access may use them more for various functions.

For more information on the US ATM card market, see the latest research: US ATM card market

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