Fewer ATMs May Force Cash-Heavy Establishments to Reconsider Digital Wallets

If trends are any indication, bars and restaurants waiting to modernize their payment options may find it’s time to embrace change.

Cash isn’t going away anytime soon, remaining the most-used payment method for in-person transactions and purchases under $25. However, the number of ATMs are on the decline, dropping to 451,500 in 2022 from its 2019 peak of 470,000. Contributing to this reversal is the rise of digital payments and apps for such formally cash-heavy transactions such as leaving a tip or splitting a bill.

This drop may also correspond to the rise of consumer confidence in digital wallets, as indicated in the PYMNTS collaboration with ACI Worldwide, “The Mobile Wallet Challenge: Replacing Physical With Digital.” While there is no differentiation in the survey between physical cards and cash, it may be reasonable to assume a physical wallet might include both.

Cash will always have a significant place in establishments traditionally reliant on the form of payment, with 16% of consumers paying with it. However, as the survey indicates, over half of consumers feel digital wallets are just as safe or safer than using a physical one. Banks are moving to innovate the space, suggesting that this shift in behavior may not decline.

Despite these developments, restaurants across the country have been dropping offering digital wallets as a form of payment, declining from 81% in September 2021 to 73% in April 2022. This could be a mistake by establishments, given the shift in consumer trust. Previous PYMNTS research found that independent bars and restaurants planned to implement an average of four new digital features in 2023. They may best served considering, or reconsidering, offering digital wallet payments.

One of these calls by consumers for digital payment offerings, when it comes to full-service establishments, is for mobile tableside payments. In an interview with PYMNTS, Chris Simms, founder and CEO of casual dining chain Lazy Dog Restaurant and Bar, noted how this method is becoming the norm. “Tap-to-pay and text-to-pay [are key] — we’re already using both of those now, which is fantastic, as people are less and less willing to give up their credit card [and as] a lot of that payment is going onto their phone via Google Wallet and Apple Pay. I think that will take more and more precedence as we look forward: making sure that we have the ability to easily take those payments.”

Cash plays a large part in the day-to-day business in nearly all bars and restaurants. However, as  consumers continue to integrate digital payments into their in-person transactions, establishments may consider reevaluating the effectiveness of declining the payment form.