As stores, restaurants, and various other types of businesses try to become completely cash-free, a new type of ATM is increasingly being installed in businesses across the country. The “reverse ATMs” dispense cards with stored value.
The businesses that are avoiding cash—a trend accelerated by the pandemic—are led by amusement parks, casinos, and sports stadiums, but also include laundromats, airports, cinemas, restaurants, zoos, entertainment complexes, among others.
How does it work?
To use a reverse ATM, the customer inserts cash into a machine and receives a prepaid plastic card in return. Most machines do not charge fees for purchasing the card, although some do charge amounts that can range from $1.00 to $5.00.
While some cards are location-specific, you generally receive a Visa or Mastercard that may or may not be reloadable.
Technology Not for Everyone
Cities like New York, Washington, DC, San Francisco, and Philadelphia, as well as states like New Jersey and Colorado, require merchants to accept cash primarily due to the potential harm to consumers who do not have bank accounts and are not accustomed to using debit or credit cards.
The rate of families that do not use the banking system is higher among communities of color, low-income individuals, and people with disabilities, according to the FDIC.
The pandemic, which initially left people afraid to use bills and coins, accelerated the migration to electronic payments.
So, people without bank accounts are adapting to mobile payment apps, which may mean that reverse ATMs will only be an interim technology and will soon be completely replaced by payment apps.
As technology advances, it may not be a physical card that you receive from an ATM, but rather a virtual card on your smartphone.
Source: Axios