Fifty years back, the first automated teller machine (ATM) was installed by Barclays Bank in London. At that time, it was a much talked-about invention by John Shepherd-Barron (1925-2010). Dispensing cash to customers without the deployment of teller or cashier was a service engineering of unique nature. Since then, banks all over the world have been installing ATMs to supplement brick-and-mortar branches. At airports in many countries, one can withdraw various currencies. An industry has developed around the ATM — its manufacturing, deployment and maintenance, cash movement, settlement and analytics. There is no doubt ATMs have made life simpler.However, debates have started in some countries to make “cash” as well as ATMs extinct in 5-10 years. In India, too, some technocrats have started saying that payment cards would become virtual by 2020 and the ATM industry has no future.Yet, it is a fact that the fascination for ATMs has been growing and there is no perceptible decline in the deployment of ATMs. According to an estimate by the ATM Industry Association (ATMAI), there are more than 3 million ATMs worldwide and the number of financial transactions — mostly cash withdrawals — in a month is close of 9 billion.In India itself, the monthly average volume is 700 million with 2,36,000 ATMs. The data for the past few years indicate that the number of ATMs, as well as the volume of ATM transactions, have been growing year after year. The banking system in many countries is modernising, and installation of ATMs is part of the process.The ATM is known in a few countries as Cash Point or Cash Machine, or Automated Banking Machine (ABM) or Cash Dispenser. The technology is pretty simple. But in the good old days, only customers of the same bank could make use of its ATMs.In due course, card networks started playing an intermediary role to make ATMs interoperable.Value-added services like balance enquiry, funds transfer and bill payment were offered. The authentication modes were also widened to include biometric verification. Number of ATMs per million population has been growing in almost every country. There are countries with 1,000-plus ATMs per million population — Russia, South Korea, US, UK, Canada and Australia — while the number is 450 for China and 185 for India.30 Years in India In India, ATMs have been around for 30 years. Citibank and HSBC installed ATMs in 1987. Bank of India was the first public sector bank to install an ATM at Mahalaxmi Branch in Mumbai.By 2000, there were about 8,000 ATMs. Private initiatives were made to make these ATMs interoperable in the country. The only interoperability possible was through Visa and Mastercard but the switching fee was prohibitive (Rs 5 to 8) and banks preferred to offer the service only to their customers. A cooperative initiative was launched in the name of Swadhan, but operational glitches were many.Three other private initiatives were made in the name of BANCs, Cashnet and MITR. In 2004, the Reserve Bank of India (RBI) tasked its technology arm IDRBT to install a national-level ATM network called National Financial Switch (NFS). The experiment was highly successful and the NFS continued to be operated by IDRBT till it was handed over to the National Payments Corporation of India (NPCI) on 2010.Once the task was taken over by the NPCI, there was no looking back. In seven years, the NPCI has made all the ATMs in the country interoperable. There are 101 member banks that have connected their ATM switch to the mother switch of NPCI. Thanks to the success of RuPay cards, as many as 700 banks in the country are now offering card payment service. Average volume of daily transactions is 12 million. State Bank of India alone has close to 60,000 ATMs. State Bank’s ATM base is one of the largest in the world — maybe just behind the ATM networks of a couple of commercial banks in China. Other six banks in India having more than 10,000 ATMs are Axis Bank (15,695), ICICI Bank (13,722), HDFC Bank (12,269), Canara Bank (11,728), Punjab National Bank (10,790) and Bank of Baroda (10,552).Interoperability of ATMs is one of the unique features of payment systems in India. There are only a handful of countries where such an extent of interoperability is visible. A customer can walk into any ATM in the country and carry out three-five transactions without any additional charge.Apart from 12 million transactions processed by NFS in a day, the ATM-owning banks have “on-us” transactions that are processed within the bank. The value-added service on NFS ATMs are balance enquiry, PIN change, mini statement, funds transfer and mobile registration. Around 15,000 ATMs have the facility of cash deposit.The usual mode of authentication is the card and 4-digit PIN. A few ATMs have biometric authentication. Cardless cash withdrawal is possible on select ATMs.Post demonetisation , there has been an increased focus on digital payments. The RBI and the government have been asking banks to market digital payment services to facilitate faster migration to a “less cash” society. But it would be difficult to say when ATMs would go extinct in India.It is a fact that in terms of value of cash withdrawal, the number of ATM transactions has shown a decline in 2016-17 compared with 2015-16. But in terms of number of transactions, it has been growing. The number of active ATMs on a day has also come back to pre-demonetisation stage.The Jan Dhan customers, whose accounts were inactive, have started using their Ru-Pay cards on the ATMs.For a vast country with a large number of people yet to avail of ATMs, it is difficult to predict its death in India. ATM is a great democratising force, making no distinction between the wealthy and the not-sowealthy as may be seen at the counters.CEOs of banks still speak with a lot of pride when they add a few hundred ATMs in a year. In tier-IV and -V centres, opening of an ATM is still the sign of progress. Therefore, extinction of ATMs is not likely in India in the near future as the mobile solution providers have been arguing in their own interest.One possible scenario can be that ATMs may get multifunctional instead of pure cash-dispensing machines. As of today, cash is still king.The author is MD & CEO of NPCI. The views expressed in the article are the author's own.