The ATM machine was once called the “most useful invention” in the banking industry, but under the impact of mobile payment, the aura of the ATM machine has faded. For the whole year of 2020, the number of ATM machines has shrunk by more than 80,000 units, and the number of ATM machines per 10,000 people in the country has also dropped from 7.87 units in 2019 to 7.24 units. The general trend of onlineization and the loss of industry dividends have forced ATM machine manufacturers to transform and upgrade, but at present, the effect is not significant. For ATM machine manufacturers, dependence on offline business is still the biggest pain point, and deeper reforms are imminent.

Two-dimensional codes have crushed the payment world, making ATM deposits and withdrawals a thing of the past, and the utilization rate of ATMs has dropped again and again. According to the latest data released by the Central Bank of the “Overall Operation of the Payment System in 2020”, as of the end of 2020, there were 1.013 million ATM machines, a decrease of 83,900 units compared to the end of 2019. The number of ATMs per 10,000 people nationwide was 7.24, a year-on-year decrease of 7.95%.

Looking back at the data for the entire year of 2020, the number of ATMs has declined significantly. As of the end of the first quarter, the end of the second quarter, and the end of the third quarter of 2020, the number of ATMs was 1.083 million, 1.0521 million, and 1.029 million, respectively, quarter-on-quarter. Decrease 14,700 units, 30,900 units, and 23,100 units.

From the data of the past two years, in the first quarter of 2018. The central bank added new terminal equipment such as self-service terminals, visual counters (VTM), and smart counters, which expanded the scope of ATM statistics, and the number of ATMs increased significantly. As of the end of 2018, there were 1.1108 million ATMs, an increase of 150,300 over the end of 2017.

However, since the second quarter of 2019, the number of ATMs has begun to decline, from 1.1104 million units as of the end of the second quarter of 2019 to 1.088 million units at the end of the third quarter of 2019, and increased to 1.0977 million units in the fourth quarter of 2019. At the end of 2018, there was still a reduction of 13,100 units.

The reduction of ATM machines can also be seen in the annual reports of commercial banks. The reporter of Beijing Business Daily noted that among the banks that have released annual report data recently, most of the banks have not paid much attention to ATM machines. Among the major state-owned banks, the Bank of China had 33,300 ATMs as of the end of 2020, a decrease of 10.76% from 37,300 at the end of 2019. Although Chongqing Rural Commercial Bank did not disclose the number of ATM machines in its annual report, it stated that “in 2020, bank card fee income will be 165 million CNY, a decrease of 15 million CNY from the previous year, or 8.38%, mainly due to debit card ATM fees. Due to the decrease in income and POS consumption.

In stark contrast is the steady growth of the non-cash payment business. According to data released by the Central Bank, in 2020, banks across the country handled a total of 354.721 billion non-cash payment services, with an amount of 4013.01 trillion yuan, a year-on-year increase of 7.16% and 6.18% respectively.

In an interview with a reporter from Beijing Business Daily, Yu, Dean of Zero One Research Institute, analyzed that according to the data disclosed by the Central Bank, the number of ATMs nationwide dropped for the first time in 2019, and the decline will be further expanded in 2020. The reason behind this is mainly the rapid growth of mobile payment, which has had an impact on the demand for cash payments. Starting in 2015 and 2016, the transaction volume of bank deposits and withdrawals began to decline. Affected by this, banks’ demand for traditional ATM machines has declined, and some ATM suppliers have even withdrawn from the market. However, AMT machines will not completely disappear, China’s regional development is quite different, and mobile payment cannot completely replace cash transactions.

The sharp decline in the ATM market demand has also forced ATM manufacturers to transform. A reporter from Beijing Business Daily noted that after years of drastic reforms, the performance of ATM manufacturers has also diverged significantly, with mixed good and bad.

Among ATM machine manufacturers, the recognized leading listed companies mainly include a few companies such as Kingteller, Cashway Technology, Eastcom, and GRG Banking.

Take China Broadcasting Express as an example. As early as 2016, China Broadcasting Express’s net profit showed its first negative growth since its listing in 2007, down 6.07%. At that time, GRG Banking Express mentioned in its annual report: “Mobile payment technology has fully impacted the banking industry, the domestic ATM market demand has shrunk, industry competition is fierce, product prices continue to fall, and the company is facing increased operating pressure.” Seek new business growth points”.

However, after many years of transformation, the performance of China Broadcasting and Television Express in 2020 is still in a negative growth trend. According to the company’s 2020 annual report recently released, for the whole year of last year, China Radio and Television Express achieved operating income of approximately 6.411 billion CNY, a year-on-year decrease of 1.32%; net profit attributable to shareholders of listed companies was approximately 700 million CNY, a year-on-year decrease of 7.59%.

Although Eastcom Communications, another ATM machine manufacturer, has increased its operating income in 2020, the company’s net profit data is hardly optimistic. In 2020, the company achieved an operating income of 2.967 billion CNY, a year-on-year increase of 10.57%. The corresponding net profit attributable to shareholders of listed companies was approximately 104 million yuan, a year-on-year decrease of 21.37%.

With the decline of ATM machines, related manufacturers are the first to bear the brunt. The price drop will inevitably lead to lower costs. Eascom stated frankly in its annual report that the gross profit margin of smart self-service equipment during the reporting period was 4.94%, a year-on-year decrease of 14.09 percentage points, mainly due to the serious decline in equipment prices. Due to increased equipment configuration requirements. Analyzing the product structure of Eastern Communications, the company’s intelligent self-service equipment industry products mainly include cash dispensers, cash recycling machines, large-value recycle machines, smart teller machines, portable card issuing machines, and other categories.

Cashway Technology’s latest 2020 performance pre-earnings announcement data mentioned that after preliminary calculations by the financial department, it is expected that the company’s net profit attributable to shareholders of listed companies in 2020 will be compared with the same period of the previous year. Around 30 million to 36 million yuan. However, the company also mentioned that it is expected that the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses will be between -12 million CNY and -10 million CNY in 2020.

In 2020, Kingteller, an ATM manufacturer that focuses on independent research and development, production, sales, and operation, has shown a decline in operating income and an increase in net profit. According to the 2020 annual performance report released by Kingteller, the company will achieve business in 2020. Revenue was approximately 183 million CNY, a decrease of 14.67% over the same period of the previous year. Net profit attributable to shareholders of listed companies was 74.563 million yuan, an increase of 10.83% over the same period last year.

Wang, a senior analyst in the financial industry, pointed out that “off-line RMB circulation is still necessary. As long as there is cash behavior, interaction is required. ATM machines still have a basis and necessity. For ATM machine manufacturers, there is definitely no problem in ‘surviving’. All you need to do is to control costs. But from an operational perspective, the profits of ATM machine manufacturers have fallen more severely, and there have been no particularly good cases of transformation for many years. At the same time, from the perspective of newly developed machines in bank branches, the update frequency is also decreasing.”.

From teller machine to smart branch

What defeats ATM machine manufacturers is not a fierce competition among industries, but the general trend of onlineization.

At the beginning of 2021, transformation and upgrading have become indispensable topics in all walks of life, and ATM machine manufacturers are also eager to try. As stated in the first quarter 2021 performance forecast of GRG, the company will focus on financial technology and urban intelligence, and accelerate the business expansion of AI+ scenarios in 2021. It is expected that the net profit attributable to shareholders of listed companies in the first quarter of 2020 will increase over the same period of the previous year. 30%-50%, with a profit of 186,819,500 -21,556,900 CNY.

Eastcom mentioned in its 2020 annual report that in 2021, it will continue to promote the transformation and upgrading of the three major industrial ecosystems of “enterprise network and information security industry, intelligent self-service equipment industry, and information and communication technology service industry”, and take this as the center to improve The overall collaboration capabilities of the entire industry chain supporting platform including R&D, procurement, manufacturing, sales, and customer service.

How can ATM machine manufacturers deepen their branches to build customer value operation centers while deepening online channels to establish their own business models?

“For ATM machine manufacturers, the direction of product transformation is to serve the bank’s intelligent upgrading and transformation, increase R&D investment, and explore the possibility of the integration of artificial intelligence, big data, cloud computing and smart devices.” In his view, ATM machine manufacturers The product chain can be extended from “teller machines” to “intelligent outlets”, from low-end businesses to high-end, complex, and core businesses. In addition, it is also possible to build smart terminal equipment and build related channels or platforms around digital renminbi and mobile payment.

Wang further analyzed and pointed out that it is difficult to build the central value of online customers based on ATM machines, because although ATM machines can directly reach customers, they can also know the transaction information of some customers, but in fact, more terminal identification of customers is Banks, ATM machines are just for banks to prepare offline, but ATM machine manufacturers have not developed their own virtual account system like third-party payment. Therefore, ATM machines can only do business under the banking system forever, and the transition is relatively difficult.

Regarding the 2020 business performance and future strategic development priorities, reporters from Beijing Commercial Daily contacted Kingteller, Cashway Technology, Eastcom, and GRG Banking respectively for interviews, but did not receive a response as of press time.