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The Economics of Everyday Things

36. ATMs

The Economics of Everyday Things

Freakonomics Network

Business

4.81.2K Ratings

🗓️ 12 February 2024

⏱️ 20 minutes

🧾️ Download transcript

Summary

Why do you have to pay $4 to get $40 cash at a bar? And who does it go to? Zachary Crockett checks his balance.

Transcript

Click on a timestamp to play from that location

0:00.0

Imagine that you're out at a dive bar on a Saturday night. You order a drink and take out your credit card and the bartender

0:15.4

she tells you they only take cash. And because you're living in the 21st century

0:21.0

you don't have any cash in your wallet. the where you see your salvation. It's an ATM.

0:36.0

A.T.M. stands for automated teller machine.

0:40.0

The name is a reminder that long ago, people used to have to get their cash from a human teller at a bank branch.

0:46.0

Today, they're around half a million ATMs in the US.

0:51.0

And most of them are those little standalone models that you find at nail salons,

0:55.1

corner stores, and bars. They're owned and managed not by banks, but by

1:00.0

individual operators who earn a living off the surcharges that you have to pay to

1:04.3

withdraw money and anyone can get into the trade.

1:07.8

It's not regulated you don't need a license. You just go out and buy one of these

1:16.2

ATMs and you know find a spot at a barber shop and you're in business.

1:22.4

For the Freak economics radio network, this is the economics of everyday things.

1:28.6

I'm Zachary Crockin.

1:30.3

Today, ATMs.

1:32.0

America's very first bank Today ATMs.

1:37.6

America's very first bank opened its doors in 1782.

1:45.0

And for the next 180 years or so, pretty much anything you did involving a bank happened inside of a branch. If you wanted to check your balance, make a deposit, or withdraw some cash,

1:50.0

you'd mosey on in and talk to someone behind the desk.

1:53.4

But by the 1950s, this labor-intensive model was no longer a good fit with the way Americans

1:59.5

were living.

2:01.0

You see this move to the suburbs and moving away from city centers. So reaching out to these people with the old branch model was expensive.

...

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