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70 of ATM transactions are still cash withdrawals
NEW ORLEANS (3/3/08)--Cash withdrawals accounted for 70% of last year’s transactions at the world’s 1.7 million ATMs, according to an industry executive. Michael Lee, CEO of the ATM Industry Association, told attendees last month at the organization’s two-day conference in New Orleans that the percentage has held steady for several years (ATM&Debit News Feb. 28). Cash is important to consumers because it has value, and they realize it is the most tangible and liquid form of money, Lee said. Cash provides immediate settlement, no settlement risk, and ensures anonymity and ease of use, he added. However, despite the popularity of cash, its U.S. market share has declined the past 30 years. The reason is that more alternative payment methods--debit, credit, electronic payments and automated clearinghouse--now compete with cash, Lee said. But the volume of cash in circulation is still steadily increasing. Between 1980 and 2005, the value of U.S. dollars in circulation has risen 400% from $160 billion to $700 billion, he noted, adding that the volume of notes has skyrocketed by 465%. Despite cash’s popularity, “inhibitors” limit its use and growth, Lee said. Inhibitors include the cost of cash transactions versus other types of payment methods--including debit cards, credit cards, checks and charge cards. Crime also limits the use of cash, he added. Three out of every four personal payment transactions involve cash. By 2011, consumers still will make 66% of all personal payments with cash, some analysts predict.
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