According to the report, 'Advanced ATM Functionality: Beyond Movie Tickets and Postage Stamps', attempts by banks to maintain revenues at the ATM over the past decade have prompted them to try everything from selling postage stamps to topping-up prepaid mobile phones. But while these features create $1.2 billion of revenue worldwide, customer use has remained lower than expected.

Jerry Silva, senior analyst in the TowerGroup retail banking practice, says that on the surface, the $1.2 billion in revenue brought in by advanced ATM features seems impressive, but when spread out across the 1 million-plus ATM units globally, the real per-machine revenue can be a challenge to justify in terms of return on investment.

According to the study, although there are currently more than 1 million ATMs throughout the world (twice the number of retail bank branches) performing 40 billion transaction annually, core functionality has changed little in the 30 years since ATMs were introduced.

Banks have sought the perfect ATM-based product to increase per-machine revenues often without investing in the major system overhauls needed for advanced functions beyond stamps, bank statements and coupons. But new regulations related to security and access for the visually impaired will soon force them to invest in Web-enabled platforms that can accommodate new kinds of services.

The report identifies two main areas as having the greatest potential for ROI: end-to-end deposit processing, which could be enabled by the proposed US Check Truncation Act and reduce the cost of processing deposits, and higher level of customised customer contact.

Silva adds: "The key to increasing the ATM value will be in providing higher levels of service and convenience, both through end-to-end deposit processing and personalised customer relationship management."