Say goodbye to the bank and hello to the hole

Money/ change in the high street
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The Independent Online
IN THE kingdom of money, the cash machine is now king. New, unpublished figures compiled by Britain's clearing banks show that ATMs - Automated Teller Machines - are our favourite means of obtaining cash.

The machines distribute 31 per cent of the cash in circulation - more than any other source, such as cashing cheques, state benefits or opening wage packets, according to the Association for Payment Clearing Services. The body, which co-ordinates transactions between the main High Street banks, says 19,500 cash machines are now installed in the UK. In 1981 there were just 5,740, giving out 7 per cent of our cash, while 35 per cent came from cashing cheques.

The machines are at their busiest on Friday night and from 11am to 1pm on Saturdays.

"In the run-up to Christmas, some machines are giving out pounds 250,000 a week," says Andrew Bailey, Barclays' head of self-service banking. The average withdrawal has crept up relentlessly, from pounds 32 in 1986 to pounds 48 in 1993.

When the world's first bank cash machine was installed outside Barclays in Enfield 27 years ago, customers had first to go into the bank and get special vouchers to use it. With them they could withdraw pounds 10 a day, in a bundle of pounds 1 notes. It was tedious, but after a slow start, the machines' popularity soared.

"People got used to the convenience and the technology," says Mr Bailey. "Habits changed. It's like video recorders: at first there was slow growth, then they took off, and now they're about at saturation point."

ATMs can now be found in railway stations, hypermarkets, motorway service stations, petrol forecourts, and even the House of Commons; in Scotland and Ireland there are mobile ones, towed around behind trucks. Analysts estimate that their numbers will peak in a couple of years, at about 22,000, given the current installation rate of up to 1,000 a year. "The original idea behind it was just that people wanted money on Saturdays, when branches were closed," Mr Bailey says. "Whoever made the decision to go ahead at the time didn't know if it would be popular or not."

The machines also offered the clearing banks a golden opportunity to save money. It costs an average of 25p for a machine to give out cash, half as much as a person. Since 1990 the High Street banks have shut 2,500 branches and shed 115,000 jobs. Staff at Barclays are planning to strike on Tuesday to protest at their fourth successive annual pay rise below the rate of inflation. But even their unions are not hopeful that anyone will notice the absence of tellers. Unifi, formerly the Barclays Staff Association, is more hopeful that a strike by computer staff, who run the ATMs and card transactions, will make the management take notice.

New functions such as printing statements, accepting payments and providing a videolink to a human operator at a remote site mean that ATMs could take over the banking world.

Might this be the final death of the walk-in bank branch? Two things indicate it is not. First - unbelievable though those under 30 might find it - not everyone likes ATMs. "Elderly people especially aren't familiar with new technology," says Helen Pilston of the Banking, Insurance and Finance Union (Bifu). "They don't like it, and they don't like ATMs. They like to talk to people and be led through what they're doing."

The banks have invested too much in branches to abandon them completely: they need to sell financial "products", such as mortgages and life insurance, and catching waiting customers' eyes is often the best means.

The British love affair with the ATM is nowhere near as passionate as that of the Spanish. Iberian machines enable you to order football and theatre tickets, or to get advice on your tax return, but in Britain customers want speedy service above anything else. "It's quality of service," says Mr Bailey. "Otherwise somebody in the queue might be using the ATM for six or seven functions. They're happy, but everybody behind them is fuming."

Just like in the old days, in fact.

The hole story

Year Number of ATMs Bank branches

1983 5,740 14,492

1984 6,815 14,361

1985 8,845 14,289

1986 10,330 14,008

1987 12,392 13,813

1988 13,980 13,702

1989 15,746 13,467

1990 17,004 12,994

1991 17,782 12,306

1992 18,282 11,751

1993 18,703 11,455

1994 19,500 11,078