Bank ATMs Shrink 15.7% as Chuseok Cash Demand Holds Up

Cash demand is rising ahead of the Chuseok holiday as people prepare gift money for parents, children and nephews and nieces, but the bank automated teller machines where they can withdraw it are disappearing fast. More than 4,600 bank ATMs have vanished nationwide in three and a half years. Banks are deploying mobile branches at highway rest stops and other transit points to meet holiday demand for cash and freshly printed bills.

The number of bank ATMs nationwide stood at 24,711 at the end of June, according to data the Financial Supervisory Service submitted to the office of Rep. Seo Il-jun of the People Power Party, a member of the National Assembly's National Policy Committee, the financial industry said on the 24th. That is down 4,610 units, or 15.7%, from 29,321 at the end of 2022. Another 636 machines were removed in just six months from the end of last year.

The decline is clear at individual lenders. NH NongHyup Bank cut its ATM count 21.8% to 3,981 at the end of June from 5,091 at the end of 2022. Over the same period, Shinhan Bank reduced its machines 21.0% to 3,829 from 4,849, and Woori Bank cut 18.7% to 3,213 from 3,950. KB Kookmin Bank was down 10.0% to 4,105 from 4,563, while Hana Bank slipped 1.3% to 3,483 from 3,527.

Banks are pulling back because cash use has fallen with the spread of mobile banking and simple payments, while the costs of operating, securing and maintaining the machines remain substantial. Branch consolidation is also eliminating ATMs that had been installed alongside those offices.

Everyday cash use is declining, but sizable demand still emerges before the holidays. Net currency issuance supplied to financial institutions during the 10 business days before last year's Chuseok reached about 4.4 trillion won ($3.3 billion), up 671.5 billion won, or 17.9%, from the same period a year earlier, according to the Bank of Korea. Net issuance is the central bank's currency issuance minus the amount returned through financial institutions and other channels.

During the holidays, even people who usually transfer money by phone often withdraw cash to hand directly to parents or to young children, nephews and nieces. That demand is why banks operate mobile branches at every holiday even as ATMs disappear. Twelve banks are running 11 mobile branches at highway rest stops and major transit hubs around this year's Chuseok holiday, offering deposits, withdrawals and exchanges for new bills, according to the Financial Services Commission.

Mobile branches are available at points along the routes home on the 24th, the first day of the holiday. KB Kookmin Bank is providing ATM and new-bill exchange services at the Giheung rest stop on the Busan-bound side of the Gyeongbu Expressway from 10 a.m. to 4 p.m. Shinhan Bank is operating a mobile branch at the southbound Hwaseong rest stop on the West Coast Expressway and NH NongHyup Bank at the Hanam Dream rest stop on the Jungbu Expressway during the same hours. Woori Bank is offering new-bill exchanges and other services until 5 p.m. at the Manghyang rest stop on the Busan-bound side of the Gyeongbu Expressway, and Hana Bank at the southbound Yangjae Manname Square rest stop.

Some mobile branches are also open outside the capital region. iM Bank is running mobile branches at Dongdaegu and Seodaegu stations on the 24th, and Kyongnam Bank at the Jinyoung rest stop on the Busan-bound side. The Kwangju Bank is providing new-bill exchange services at the Yeonggwang Sangsahwa Festival site from the 24th through the 27th. Some mobile branches, including those of Industrial Bank of Korea (024110) and The Jeonbuk Bank (006350), wrapped up operations on the 23rd, so customers should check each bank's schedule and hours before visiting.

Regular bank branches are closed during the holiday, and services and operating hours vary by mobile branch. Exchanges for new bills may also become unavailable once each location runs through its supply. "During the holiday, it is best to set aside the cash you need in advance or check the locations and operating hours of mobile branches beforehand," a financial industry official said.