As the market moves toward a cashless society, some stores install “reverse ATMs” that give customers cards in exchange for cash.
Key Details
- Society has been trending away from cash, but this move away from physical currency accelerated during the pandemic as many stores opted for touchless payment methods.
- However, some customers may not have access to bank accounts or credit cards, preventing stores from going entirely cashless.
- One solution has been installing reverse ATMs or cash-to-card kiosks.
- These machines are most popular in amusement parks, casinos, and sports stadiums.
Why it’s news
Going cashless is more convenient for many store owners and reduces potential security risks, as there is no cash drawer for anyone to steal. However, around 4.5% of Americans do not have a bank account or credit card, Axios reports.
To continue serving these customers, businesses are getting creative, and the business of reverse ATMs is starting to take off in a big way.
Wavetec executive Naushervan Beg says that his company, which sells reverse ATMs, is in a “competitive business.”
“Cash carries a lot of friction, right?” Beg tells Axios. “Many venues are willing to pay for the machines because, for them, the bigger pain point is taking the cash.”
To use the machine, customers simply insert cash and receive a prepaid card in return. Some machines charge a $5 rate per card, but others have no fee. At some venues, these cards can only be used in their stores, but other machines dispense a reloadable Visa or Mastercard.
While the seller pays the interchange fee just like with any other card, some of these cards have “dormancy fees.” If the remaining balance on a card is not used within a time limit, the user may be charged a fee, Axios reports.
For now, merchants in places like New York, San Francisco, Washington, D.C., and Philadelphia are required to accept cash payments, but the popularity of these machines could change that. Nearly every industry, from airports to zoos, is installing, or at least considering, a reverse ATM.
However, these machines can be expensive for smaller shop owners. A reverse ATM from Wavetec starts at $6,000, and that is not taking into account servicing fees.
