The Rise of Reverse ATMs: How Reverse ATMs are Changing Payment Systems

Everyone knows what ATMs are - but do you know about reverse ATMs? In today’s fast-paced world, convenience drives everything. Reverse ATMs are shaking things up for both businesses and shoppers, making it easier to handle cashless payments. Reverse ATMs are already quite common in Asia and Europe, and they’re now steadily becoming common across North America as well.

For decades, ATMs have been used with very little innovation. Consumers use them to withdraw cash from their accounts. Reverse ATMs are actually do the opposite, Reverse ATM’s offer a new and innovative way to make contactless and digital payments. We can only expect to see Reverse ATM’s popping up everywhere as the world is leaning up more towards cashless future.

What is Reverse ATM?

Reverse ATM, also known as cash-to-card kiosk, is a machine which allows you to deposit your cash and get a prepaid debit card in exchange. Unlike regular ATMs that give you cash, reverse ATM’s helps you to convert your cash into a card that you can use for purchases.

These kiosks are designed to suit the user and often have security features to keep the items safe. You can pay them at places like playgrounds, amusement parks and restaurants, which makes it easier for people who don't like banks or don't like cash to make transactions.

Reverse ATM’s have emerged as a major innovation to the banking industry, especially in response to the growing trend towards cashless transactions. As in every possible way, businesses are trying to eliminate the cash system, while at the same time they are accommodating the customers who like cash, on the contrary, reverse ATM’s are providing a practical solution.

What is the purpose of reverse ATM’s?

Reverse ATM’s have provided various solutions to various problems to the individuals and businesses. For those who are unable to use traditional credit or debit cards, reverse ATM’s provides a solution; For businesses who want to go cashless, they provide another. The reverse ATM is another step towards the future of digital payments, leaving largely cash in the past.

What are the benefits of reverse ATM’s?

Instead of opening a new bank account and waiting a week for your debit card, you will receive an active prepaid debit card immediately; No need to spend hours in the branch with your account manager, no need to wait for weeks for your debit card to be activated, no need to call someone for help to activate your debit card.

Reverse ATM’s provide contactless payments

Contactless payments is currently the preferred payment method of consumers. During the pandemic, contactless payment becomes popular as it's a safer way to pay compared to handling cash.

 

A practical solution for people without a bank account or debit card

According to 2021 data from 38 countries, an average of 8.31% of people over the age of 14 do not have access to European residence cards, with huge differences between countries. Reverse ATM’s help those people without a bank account or debit card by providing a payment option for contactless or online purchases where cash isn’t accepted.

A solution for those who prefer to keep liquid cash

For various reasons, some people prefer to keep paper money liquid. However, after the pandemic, this became even more difficult because some people tried to stop the process of cash transactions completely.

Reverse ATM’s also provide a solution for people who prefer to make cash deposits, allowing them to “top up” their prepaid cards with the required amount of money instead of having to keep unused balance in their bank accounts.

The practical considerations for adopting reverse ATM

Before implementing reverse ATM technology in your store, there are two key factors should be considered:

 

1. Cost involved
2. Type of card distributed

The cost implications

Reverse ATM’s come with the advance cost of several thousand Euros, making them more viable for medium and large sized businesses compared to single ownership. Once set up, cash-to-card machines operate as usual so that they do not charge a fee for a prepaid card, but collects the amount charged on the card. When the card is used to make purchases, the seller is charged an interchange fee as is done for cards issued by banks.

Store-specific vs. generic-prepaid cards

Some cards are store-specific and some are generic. Some are rechargeable while others are designed for one-time use only.

Store-specific cards

Some stores and venues such as sports stadiums, theaters and amusement parks use venue-specific prepaid cards as their preferred method of payment, especially if they do not have cash registers or do not accept cash. Cash filled on this type of card can be spent on things like store entry tickets, physical items or food vouchers.

Generic-prepaid cards

Generic reverse ATM cards often issued under brands like Visa or MasterCard, these cards may or may not be rechargeable. These cards can be used to make purchases and transactions anywhere.

How does reverse ATM differ from ATM reversal?

As mentioned above, reverse ATM is a kiosk that allows users to deposit cash and obtain a prepaid debit card, thereby facilitating cashless transactions. Meanwhile, ATM reversal refers to the process of canceling a traditional ATM transaction, often due to error or fraud, resulting in funds being returned to the customer's account.

Reverse ATM: A step closer to a cashless society

While many people still prefer paying in cash, the popularity and use of cash payments is increasing across the world. The reverse ATM, although not a complete solution, represents a huge step forward in creating an inclusive society where anyone can access online and digital payments, no matter their banking status or eligibility for a credit or debit card.

Reverse ATM can also help in streamlining the transactions, especially in places where a good service is very important. The potential for digital wallet loading would be the next step in this technology, a step that would make these machines more inclusive and in demand for many people in today's society.