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Cash Agenda 2026:
2025 proved to be an eventful year for the U.S. cash industry, marked by a surge in mergers and consolidation activity. Despite expectations of decline, cash once again proved more resilient than anticipated U.S. cash in circulation rose 2.7%over the previous twelve months, while the average number of cash payments per person has remained steady at seven per month for the last four years. Below are our key cash industry trends to watch in 2026.
Continued channel migration - Are your ATM recyclers optimized?
2025 saw a continued trend of migration away from teller cash transactions towards self-service channels. In 2026, we expect this trend to continue as customers become more comfortable using the technology, and banks continue to invest in sophisticated technological solutions across their estates. Some 60,000 new recycling ATMs are expected to be installed by2029 across North America.
Banks that have already rolled out recycling technology and activated deposit-accepting functionality across their ATM networks have already seen a significant increase in deposits – in some cases up to 50% in 2025 compared to pre-COVID levels.
This year, as customer behavior becomes entrenched and migration continues, the challenge for banks and other cash service providers will be to optimize their cash recyclers accordingly. The key element for banks to consider, right down to the individual machine level, is the variance between the rate of deposits and withdrawals. Making appropriate, dynamic adjustments to forecasting models can create a headache for back-end operations and can be a source of inefficiency. The banks which recognize this, and are proactive in their operational adjustments, stand to make huge gains in their cash productivity -those that don't, risk falling behind in 2026.
Consolidation in cash to continue - Are your cash operations strategically aligned?
In 2025, U.S. banking saw significant consolidation, driven inpart by a regulatory environment viewed as more conducive under the Trump administration. With the average time to complete a deal after its announcement falling to the shortest time since at least 1990, significant mergers included Comerica-Fifth Third, Capital One-Discover Financial, Pinnacle-Synovus and PNC-FirstBank.
As operations consolidate and rationalize, physical networks across the U.S. are likely to continue to shrink and further pivot away from physical cash distribution toward customer-service centers in 2026. By their latest count, the Federal Reserve has observed that the number of bank branches and ATMs has already declined by 1.5% and 5.8%, respectively, since 2023.
There are benefits to this, fewer players with relatively larger networks means greater economies of scale to reduce operating costs, allowing for improved productivity of cash. Additionally, with the overall number of cash access points decreasing, many individual ATMs may become busier and more profitable as a result.
Although banks may benefit from greater economies of scale, mergers can increase risk in cash management. Internal systems must be able to adopt and must be advanced enough to handle increased volume. In many cases, older legacy solutions can struggle to scale up and integrate with disparate systems.
Furthermore, any vertical integration between the cash industries’ suppliers and banks can introduce new risks to the ecosystem, particularly where the independence between players is reduced. Conflicting incentives and priorities must be actively managed to preserve independent decision-making, sustain competition, and keep the cash ecosystem productive.
Cooperation in cash - Is a transition to dynamic operating models on the horizon for your institution?
As ATM and branch networks become increasingly efficient with cash recycling technology, the next great frontier in cash-management optimization in 2026 and beyond becomes the transition towards more flexible, dynamic operating models. Dynamic operating models represent a huge challenge to both vendors and banks: vendors must adapt their physical operations, while the banks must ensure that their forecasting is state of the art to be able to accurately react to changing demand.
However, market pressures to cooperate may be on the horizon for the US cash industry. The widespread take-up of cash recycling may mean reduced volumes at critical points in the supply chain. A recent study by The Federal Reserve found that in areas where ATM recycling had been introduced, cash volumes in local processing centers reduced by between 10% and 30%. To remain efficient with reduced cash volumes at certain stages in the ecosystem, vendors and FI's must adapt their operations accordingly through becoming more cooperative and improving their flexibility. In practice this will mean greater real time data sharing, enhanced forecasting and new working arrangements for banks and their vendors.
Although a transition to flexible operating models may appear daunting, the potential benefits in termsof productivity are already proven across regions such as Europe, where such models are both widespread and effective. Although still uncommon in the United States, 2026 could mark an inflection point at which U.S. financialinstitutions begin to make this transformational leap.
