ATMIA and EPC Publish a Manual on Best Practices in ATM Cash Replenish...

ATMIA and EPC Publish a Manual on Best Practices in ATM Cash Replenishment in Europe

Creating a more efficient and less costly cash handling process

31 October 14

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ATMIA and European Payments Council ( ) publish white paper on best practices in ATM cash replenishment in Europe

Despite the fact that cash accounts for a falling proportion of retail payments, it still remains the predominant payment method in Europe. For this reason, to help create a more efficient and less costly cash handling process, the European Payments Council ( ) has joined forces with the ATM Industry Association (ATMIA) to devote a manual to ‘Best Practices in ATM Cash Replenishment in Europe’ (see ‘related links’ below). It was produced under the premise that optimising the cash cycle must involve optimising the main distribution channel for giving people access to cash, the automated teller machine (ATM).

The manual is the result of a multi-stakeholder project involving the ATM Industry Association (ATMIA), the European Intelligent Cash Protection Association (EURIPCA) and the . The overall goal is to enhance and reduce the costs of the ATM replenishment process and staff training.

The paragraphs that follow provide an overview of the key points addressed in the manual:

Cash and the crucial role of the ATM

Cash today remains the most frequently used means of payment for retail transactionsand the ATM has become an essential feature of daily lives, making it possible to access cash at any time of the day, throughout the year, and also increasingly allowing merchants and others to deposit excess cash without having to go to a bank teller.

Given that ATMs have become the main distribution channel for cash, optimising the cash cycle means optimising ATM operations. At the end of 2012, according to the European Central Bank (ECB) Statistical Data Warehouse, ATMs in the European Union ( ) generated 12 billion transactions for a total value of 1.385 billion euros. At the same time, the total value of cash in circulation was approximately 937 billion euros in the . In other terms, ATMs disburse almost 1.5 times the value of cash in circulation. In reality, this value is much higher as a significant proportion of cash in circulation - probably in excess of 50 percent - is not actually used for transactional purposes but is used as a store of value either domestically or internationally. ATMs are also playing an increasing role in the collection of cash with the deployment of either cash-in machines (CIMs) or cash-recirculating machines (CRMs).

As the manual highlights, professionals in the cash value chain hold a shared responsibility to continuously review processes and methods in order to ensure this payment method is provided in a cost effective manner, whilst at the same time delivering the service to the level of quality expected by consumers.

The cost of cash replenishments

Cash replenishments cost approximately 2 billion euros per year in the . The number of ATMs in the reached 435,000 units at the end of 2012. Even though the number of units has been relatively stable since the 2008 financial crisis, the network has grown by approximately 50 percent since 2002. The average ‘Total Cost of Ownership’ of an ATM varies according to the type of machine, the location and the country but according to industry analyses it amounts to between 10 and 20,000 euros. Assuming an average cost of 15,000 euros per machine, the Total Cost of Ownership of the ATM network in the amounts to approximately 6.5 billion euros. The cost of cash, which includes the sourcing, preparation and delivery of cash to the ATM, as well the actual replenishment of the machine and the handling of residual cash, represents between 20 and 40 percent of this total, i.e. between 1.3 euros and 2.6 billion euros per year.

Optimising the cost of replenishment is a balancing exercise between the cost of transportation, processing, logistics and security on the one hand, and the cost of money on the other.

With interbank interest rates at historically low levels, the cost of holding cash has been reduced. This has contributed to reducing the overall volume of replenishments over the past few years. When rates increase again, it will become ever more important for banks and deployers to monitor and optimise the costs of servicing ATMs. Cash management and forecasting software is an important tool to measure the cost of cash.

The ATM replenishment process

ATM replenishment is a simple process but complex to manage for a large estate. Ever since the first ATMs were deployed in the early 1970s, significant improvements have been made both in terms of technology and processes in order to facilitate the replenishment. However, this evolution has also led to a high level of diversification regarding hardware, software, locations and available functionalities as well as the security of the ATM site. Moreover, deployers also need to take into account existing regulations, especially those which are security-related regulations, when they define ATM replenishments procedures. The complexity arises when ATM deployers are required to co-ordinate replenishments across a broad network of ATMs, with heterogeneous machines, diverse locations and multiple stakeholders. This requires minute project management to achieve this in a timely, cost-efficient and secure way.

The first decision consists in selecting who will be responsible for the replenishment. The holistic replenishment process necessarily involves multiple stakeholders, to source, prepare and transport the bank notes and then to secure the site and load the notes into the ATM. However, a key decision is to select who will manage the process. There are four alternatives; the bank staff, the merchant, the cash-in-transit company (CiT) and the replenishment as part of a managed services contract. In the case of a managed services contract, the contract can be managed by a CiT, a hardware vendor or a third party.

Unfortunately, there is no ‘one-size-fits-all’ replenishment process suitable for all ATMs. A number of factors influence the optimal replenishment process for a given ATM. These include internal factors such as the number of ATMs in the estate, site location, who will be managing the replenishment, frequency and the type of machine. External factors will influence the decision as well such as the sourcing of the banknotes, security risks associated with the site, regulations and CiT costs. The three main processes are:

  • Cassette Swap: filling cassettes in a cash centre and swapping the cassettes against the empty ones in the ATM.
  • Cash-Add: opening the ATM and adding notes to the cassettes.
  • Cash-Swap: opening the ATM, withdrawing cash from the cassettes and then adding new notes.

Replenishment is a highly sensitive operation in terms of security in particular as it requires opening the ATM safe leaving the cash and the ATM unprotected.

The replenishment operation should also be used to check that the ATM has not been subject to attempts of fraudulent activities:

  • Detection of fraudulent devices and ATM modifications
  • Evidence of previously perpetrated or attempted physical attacks against the ATM.

The actual location of the ATM is a key element of its security. Deployers should select ATM sites which offer sufficient security.

The frequency of replenishments

Recirculation has become an important lever to reduce the frequency of replenishments.

The installed base of recirculating ATMs has increased throughout Europe. According to an estimate from the , 18 percent of bank ATMs had a cash-in function in 2012. Initially, deployers were focusing on achieving a balance between deposits and withdrawals. The technology and the processes have both improved and enabled deployers of these machines to reduce the frequency of replenishments even for sites where deposits and withdrawals do not match.

Further ways to optimise the costs of servicing ATMs

Industry initiatives could further contribute to optimising the costs of servicing ATMs. So far, optimisation of ATM operations has consisted essentially of optimising each of the different stages of the replenishment process. In order to achieve further efficiencies, a paradigm shift is required to improve operations from an industry perspective. One example of this evolution is the standardisation of electronic data interchange (EDI) standards which enables all stakeholders to understand different languages and consequently facilitates interoperability. Another illustration is the development of dynamic scheduling, which enables just-in-time replenishments.

A step in the right direction

Whilst no best practice advice offered can guarantee a fully successful outcome, the industry experts who contributed to the production of this manual have attempted to provide a comprehensive and ‘best-of-breed’ overview. However, best practices are not a one-off effort, and neither should they be viewed as a one-way communication. On the contrary, ATMIA and the do hope that the manual will serve as a catalyst for both debate between, and suggestions from, the professionals in the ATM replenishment chain, which would lead – together with the evolution in technology – to a further iteration of the best practices in the future.

The ’s primary objective is to support a shift from cash to electronic payments but acknowledges that cash still remains the predominant method of payment in Europe. For this reason, it is in full support of any initiatives, such as this newly published manual, which seek to create a more efficient and less costly cash handing process.

For further information on the ’s work together with other stakeholders to further improve deploying and re-circulating cash, refer also to the Publication, entitled ‘Improving the Efficiency of the Handling of Cash - Cash Cycle Models’ (see ‘related links’ below).

Leonor Machado is the Chair of the Cash Working Group.


Related links:

The ‘Best Practices in ATM Cash Replenishment in Europe’ manual in both English and French is available on the ATMIA Website 

EPC Publication: Improving the Efficiency of the Handling of Cash - Cash Cycle Models 

European Central Bank Press Release (9 September 2014): Payment Statistics for 2013 

European Central Bank (September 2012): The Social and Private Costs of Retail Payment Instruments. A European Perspective 


Related articles in previous issue:

EPC Newsletter: Articles Published in the Section ‘SEPA for Cash’



In September 2014, the European Central Bank published the 2013 statistics on non-cash payments, which comprise indicators on access to and use of payment instruments and terminals by the public, as well as volumes and values of transactions processed through payment systems.

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