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Citi shares low-tech cash machines to lure customers on the cheap

Citigroup Inc has plugged into tens of thousands of outside vendors’ cash dispensers across the United States this year, part of a plan to cut costs and entice customers after closing hundreds of branches.

It signed up with major U.S. ATM network Allpoint, continued using another, MoneyPass, and now retail customers can access their money, fee-free, at 64,000 machines in assorted stores across the country with a Citi smartphone locator app. Before Citi fully-embraced that strategy though, it asked customers what they most wanted from a bank that they could not get from smartphones, which customers are increasingly using for payments, checking balances and making deposits.

The answer, Will Howle, Citi’s president of U.S. retail banking, said, was access to cash when and where they need it. They have little interest in fancy machines in stylish branches, he said in an interview.

“As we were reducing (branch) locations, we were actually increasing access points through ATMs,” he said. “People still want cash and when you need it, it is in the moment.”

[…]Building standalone ATMs – which cost about $50,000 to $100,000 per machine, according to banking consultancy Novantas Inc – would be prohibitively expensive for Citigroup, which is working to cut costs while increasing revenue to meet financial goals for 2020.

And the expense might be for naught with cash machines gradually losing relevance. “Owning machines, depreciating them and shutting them down is very expensive,” said Novantas consultant Kevin Travis.

Read the full article on Reuters

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