Assessing SA's ATM market for consolidation

Genesis was commissioned by a large cash-in-transit company to conduct an end-to-end analysis of the ATM industry and the factors shaping it, with the view to quantify the consolidation opportunity and industry cost savings.

The top-down analysis estimated the true value of cash in the South African market, using two approaches (Reserve Bank data and bank data). From this a five-year view on cash was formed.

Recent developments in ATM and cards – such as the effect of SASSA, payment innovations and regulatory changes – were also incorporated into the analysis. The top-down approach yielded a significant opportunity for consolidation.

The bottom-up analysis involved a more detailed quantification of the consolidation opportunity. ATM supply data was extracted from a number of sources and then reconciled to form the most complete data set possible.

The demand for ATMs was determined at a municipal level through the use of regional data. The supply and demand findings were overlaid to define over-capacity at the municipal level. The significant opportunity for consolidation was verified, however, as the expected magnitude of this opportunity was lower in the bottom-up.

Based on these findings the client presented a detailed opportunity for consolidation to its board.