It has been announced by the UK Government that from next year customers will be able to make charitable donations through ATMs. Undoubtedly one of the reasons this has been put forward is reduce the the lobbying by charities to let cheques continue beyond 2018, when they are currently scheduled to end. The charities argue that since such a large amount of their donations come via cheque the end of the cheque could be a disaster for them. The Government argue that this is an alternative.
Similar to many of the interim recommendations of the Independent Commission on Banking, this announcement, while well intended, has not been thought through as to how the practically it will actually work.
With 250,000 charities in the UK, your wait behind the person in front of you to get your weekly £100 cash out of the ATM, could be exceedingly long as they try to find the charity that they want to make a donation to. Exactly how are they going to choose the charity? Will it be a freeform entry (imagine all the typing mistakes and money swishing around the banks unposted because the charity name is not recognised) or will it be by scrolling down a list. If time is of the essence then maybe the ATM will only allow donations to one charity for a period of time, but how will it be decided which charity and how will you as a customer know which ATM is allowing donations for the charity you want to support?
Various countries around the world have experimented with offering additional services at the ATM, to make the ATM more profitable for the bank. Examples include booking tickets for the bullring (not the one in Birmingham, England) or the Alhambra at ATMs in Spain. The challenge is that most customers do not want to spend a lot of time waiting to carry out their transaction, particularly when the ATM is outside. Most customers using ATMs want to 'cash and dash', so extending the waiting time while someone fumbles to find a charity to donate to is unlikely to result in a better customer experience or more money being donated to charitites.
So why can charities be bad for Bank CIOs? Recently Mr Hagiwara Tadayuki, Bank IT Chief at Mizhuo Bank left his job following the ATM network at his bank crashing. The reason? All the people making charitable donations following the earthquake in Japan overwhelmed the ATM network. Of course you could argue that only in a society such as Japan would an employee be expected to do the honourable act of resigning. After all if the same rules applied in Australia then NAB would probably be on its fourth CIO this year.
So if some of the UK banks may be a little slow next year in implementing the ability to make donations through their ATMs you'll know why!