The financial market infrastructure provider SIX and the payment technology company Diebold Nixdorf are pooling their expertise in cash supply and ATM operations (referred to as ATMs in the press release on Tuesday).

The two companies have developed a new approach to address market challenges through «the combination of know-how, technology, and a broad partner network,» according to the press release. They will evaluate with innovative partners like Helveticor (a high-security logistics provider) «how cash logistics can be made more sustainable and efficient.»

Fewer Branches and ATMs

The serious background to the announcement is the ongoing digitalization in payments, which is also evident in everyday life. Cash and cash supply are adapting to market changes, SIX notes. In Switzerland, cash still holds significant value among large sections of the population, but the disappearance of bank and post offices as well as ATMs affects its availability.

According to SIX, the number of bank branches has decreased from 3,100 to 2,600 and the number of post offices has dropped from 1,500 to 800 between 2015 and 2023. At the beginning of the 2000s, there were 7,200 ATMs in operation across Switzerland; today, that number has dropped to fewer than 6,40.

Fighting the Downward Spiral

This development poses the risk of increasing cash supply costs, putting pressure on banks as ATM operators, and consequently driving up the costs for providing the necessary infrastructure, explains SIX. This reflects the Swiss National Bank's (SNB) concern about a negative spiral in the cash sector.

The collaboration between SIX and Diebold Nixdorf aims to help ensure a broad cash supply in Switzerland in the long term. Together, they cover the entire cash supply value chain. For ATM users, nothing should change, but banks are expected to benefit from streamlined processes. The goal is to achieve efficient cash management by offering all relevant operational and management services from a single source.

Making Cash Management More Efficient with ATM Pooling

The key term here is «ATM Pooling,» which means that Swiss banks currently operating ATMs will integrate them into a separately operated network. SIX explains: «Such a network would specifically aim to optimize the operation of ATMs in terms of geographic coverage, operation, and cash logistics so that Swiss banks can continue to guarantee comprehensive access to cash for their customers and ATM users.»

An event with Swiss banks as ATM operators is planned for September to address the requirements for implementing ATM pooling.

The Not-So-Invisible Hand of the National Bank

So far, SIX has not widely recognized as a staunch defender of banknotes and coins, due to its involvement in cashless payment infrastructure and its services related to card and mobile transactions.

The issue of cash availability and acceptance is increasingly preoccupying Swiss politics, with two popular initiatives launched on this topic. The SNB has made it clear that it does not want to tolerate a negative spiral in the cash sector. Therefore, the announcement by SIX and Diebold Nixdorf can also be viewed as a strategic response to the Swiss National Bank's subtle pressure to ensure the security of cash supply.