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28. June 2017

Cash and carry: Bye bye ATM?

Why withdrawing money at the supermarket is a clever idea

Nowadays, money is a lot like bread rolls or newspapers. You can get it anywhere and anytime – whether you are buying ‘The Times’ at the bakery, getting fresh bread at the gas station or withdrawing money at the local supermarket. The last of which is actually turning out to be quite a clever business idea.

„Cash Back“: a good deal for everyone

“Some money to go?“ This question is becoming more frequent at German supermarket checkouts whenever the customer has bought goods exceeding € 20 in value. Anyone thinking of withdrawing money anyway will gladly accept, since they won’t have to worry about service charges at the ATM, which are currently being increased.

The system is called „Cash Back“. As of today, account holders of nearly all banks participating in the Girocard-service can withdraw up to € 200 from their accounts at the following German supermarket chains: Rewe, Edeka, Penny, Netto, Toom and Aldi Süd. No service charge is added. And the banks are profiting as well. They are saving installation and maintenance costs, which in the case of the ING-DiBa bank, by its own account, amount to € 2,000 per month.

Everybody profits, because

  • the customer won’t have to make the trip to the bank or the ATM.
  • cash withdrawal is free of charge.
  • participating supermarkets are registering more sales upwards of € 20, since customers in need of cash will have to match the minimum purchase.
  • the amount of cash having to be handled by the supermarkets is reduced.
  • participating banks are granting their customers access to cash without having to invest in new ATM’s. They also save maintenance costs on existing machines.
  • participating banks do not incur any costs, the supermarket accepts the transaction fees for the credit cards as before.

The system is especially interesting for banks with no or few services, such as the smartphone bank N26 or the online bank DKB who have no branches and no ATM’s of their own. They would be able to offer hundreds of cash points at once. ING-DiBa bank also does not possess any branches but has already invested in 1,300 cash machines, mostly located at Aral gas stations.

System is beneficial to all involved

Banks have been trapped in a sort of economic shock-induced paralysis since low interest rates have all but annihilated the once lucrative revenues from credits and loans. And they are having trouble to finance their corporate structures via profits. Ideas which combine lower costs with a service expansion are correspondingly more than welcome: high-quality service still is a very effective tool when it comes to customer loyalty. But not only banks appreciate the Cash-Back-system, so do the customers. As long as they save themselves the trip to the nearest ATM and save service fees, they are happy.

Withdrawing cash at the supermarket is beneficial to all involved. Banks can cut down on costs and improve their image by not charging service fees. Supermarkets profit from increased sales due to the minimum purchase required, among other things. All in all, not a bad idea – made possible by digital methods of payment.

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