Asia is largely leaning towards cashless payments, putting the pressure on traditional banking methods. Some analysts believe the boom in cashless methods in Japan and China could end the rule of ATM use in the region.
According to a Nikkei Asian Review published on Sunday, British fintech payments and technologies research firm Retail Banking Research revealed that worldwide ATMs counts dropped for the first time last year.
As of the end of 2018, the total number of ATMs fell by 1 percent. In China alone, ATM counts slipped by 6.8 percent compared to 2017's records. In Japan, on the other hand, the number of cash machines dropped by 0.2 percent.
Younger consumers in China have largely adopted non-cash payments and the report indicated that only a few of them make use of ATMs. QR code technology brought a breakthrough in the country's banking sector that is increasingly becoming the norm.
Even in India, the report stated that ATM "growth slowed considerably." The trend is not surprising in all of Asia as financial technology (fintech) is increasingly becoming popular. However, even in India, the world's third-largest ATM market, non-cash payments are booming.
The United States couldn't escape the pressure as well. The RBR report revealed that "branch closures have led to fewer bank ATMs." In total, the drop in ATMs in the U.S. was recorded at 0.9 percent last year.
Analysts suggested that global banks, especially those in Asia, should start revamping their processes so they won't have to close up shop as the contraction of branches is more rampant than ever.
Japan's Mizuho Financial Group is planning to shut down 130 bank branches within five years. Some finance experts are expecting to see more banking groups and institutions announcing branch shut downs in the coming years.
Late last month, The Jakarta Post reported that the growth of fintech in Asia is paving the way for financial inclusion in the region. Some fintech systems are expected to allow for unbanked consumers to make use of non-cash payments, especially with the rise of bitcoin and cryptocurrency.
While some companies such as Facebook are trying to get into the cryptocurrency trend, global banking regulations are stopping them from doing so. The disapproval of lawmakers and banking regulators in Facebook's proposed Libra cryptocurrency has drawn the attention of some fintech supporters.
Some analysts believe the Calibra project will help boost the growing cryptocurrency sector. However, it appears that Libra is years away from getting approved as many lawmakers and finance experts believe this form of non-cash payment could pose serious privacy threats.
