ATMs and POS Diffusion: An Econometric Model Albania case study

During the last decade the banking system in Albania has been affected by deep changes in the evolution of the number of automated teller machines (ATM) and points-of-sale (POS). The growing prospect of using cards as a payment instrument has been noted since 2004 when the first data are being recorded and published. The aims of this study are twofold: to examine the impact of some indicators which may affect the evolution of the number of ATM and POS in Albania and to forecast ATM and POS diffusion rates over time. In our analysis we have taken into consideration yearly data (from 2005-2016) of some indicators which may influence the ATM and POS diffusion. Regarding their nature, we have organized these variables in five subgroups (economic, banking, energy, technology and demography). In the first part of the study, a performance evaluation is performed on the proposed models and followed by a discussion on significant indicators. The best model selected is then used in the second part to forecast the diffusion of the ATMs and POS terminals in the upcoming years. We found that some key indicators are significant to the evolution of ATMs and POS, on the other side technological development indicators have no impact on the progress of the number of ATMs and POS in Albania. The results of this study are important for the banking system and policymakers to evaluate the diffusion of automatic teller machine and to predict the future evolution of automatic payments in Albania as a measure of economic progress and demand for currency.