Venmo has surpassed ATMs in terms of both number of transactions and total payment volume. And this is just one of several ATM-killing trends. In this Industry Focus: Financials clip, host Jason Moser and Motley Fool contributor Matt Frankel, CFP discuss the slow but steady decline in ATM demand and what it could mean for investors.

A full transcript follows the video.

This video was recorded on Oct. 1, 2018.

Jason Moser: In other news, I read this article last week, I thought this was pretty fascinating. It's in regard to Venmo. We know that Venmo is a property of PayPal, one of our favorite companies here. This article is talking about the fact that Venmo is now more popular than the ATM, the automatic teller machine, that changed the world back when I was a kid. I mean, that was the most unbelievable thing. All of a sudden, you could go to a machine and get your cash out of it? It was so convenient! No more checks, didn't have to worry about a thing. Now, here we are in this day and age where cash is essentially becoming an inconvenience. I found this to be fascinating from a number of angles, but the bottom line here is that Venmo is really taking over in a lot of ways where cash used to be king.

Matt Frankel: Cash has become a lot more inconvenient when compared to the options. For example, I'm going to be at headquarters later this week. A friend of mine there and I will share an Uber from the airport. I'll probably pay for it, and he'll Venmo me his part. That's a lot more convenient than having our Uber drivers stop at an ATM, him getting cash out of the ATM, getting change somewhere and then giving me his half.

People are finding the convenience of this to be really, really useful. It's not just millennials. This is creeping into the older generations, as well, really seeing the value of this.

From an investor standpoint, one of the more interesting things I see in this story is that one of the big advantages that the big banks have are their vast ATM networks. This advantage may be going away. If Wells Fargo tells one of their customers, "We have you know 5,000 ATMs you can use for free around the country," someone who uses Venmo all the time would say, "So what?" So, this could be a big advantage going away for the big banks who have relied on their vast ATM networks. I actually think Wells Fargo has 10,000 or something.

Moser: Probably.

Frankel: The point is, that was a big advantage. As you said, it was the coolest thing 20, 30 years ago, to be able to just get cash from an electronic machine outside of a bank. Now, not so much.

Moser: Yeah. I'm trying to figure out how to avoid getting cash. I rarely frequent an ATM anymore. I mean, I guess if I need to get a large amount of cash for whatever reason? But I'm finding more and more, if I need just a little bit of cash in my wallet, I'll take a little cash back when I'm at the grocery store or something. More and more, I find myself very rarely going to the ATM.

When it comes to Venmo, I think this is fascinating. One of the reasons why we like PayPal so much is because it's not just PayPal anymore. Everybody knows PayPal. But Venmo is also part of PayPal. I was reading through a recent investor call with PayPal. They were talking about Venmo monetization. Venmo is still a very young business in the context of what PayPal has to offer. It does skew younger, as you mentioned. They're working on that monetization model. They have three ways that they're doing that right now. One of them is instant cash withdraw. Another is using the Venmo debit card. The other is actually a Venmo customer shopping at a merchant. It seems like they're taking this somewhat slowly, somewhat methodically, in order to, first and foremost, provide the convenience that people are really after. If those three monetization strategies sound familiar, it's because they sound a lot like what Square is doing too.

Frankel: Yeah, with the Square Cash app. I was actually just going to bring that up. You have Venmo, Square Cash. The banks' answer to this has been Zelle, which has actually picked up a lot of traction on its own. But the whole trend, it's making ATMs obsolete. Like you said, it's not just Venmo. Square Cash recently surpassed Venmo in total downloads. Square Cash isn't quite as popular, in terms of check splitting. At least in my circles, it's not. But it does have the potential to amplify this non-dependence on ATMs even more. I think I've been to an ATM twice in the past year.

Moser: Yeah. Another thing I was reading up here earlier today, a company that just went public called Eventbrite has a relationship they forged with Square. That is something that's going to go on for the next five years as it takes hold in 2019. Eventbrite is basically ticket purchasing for live events. I can only imagine that we're going to see Square more and more get into that Venmo-like game, being able to break down finances, split finances and whatnot, particularly if they're in that market like live events, where friends might go together. Really interesting way to look at how finances are moving around.

Also with PayPal, a little while back, they acquired a small company called Xoom, which was one of my favorites here. We had it in Million Dollar Portfolio for a while before PayPal jumped in there and acquired it immediately. Xoom was in the business of outbound remittance, which is basically, anybody who works here in the United States but has family located in international locations -- Philippines, China, Mexico, wherever it may be. Xoom built this really terrific model for outbound remittance that PayPal snapped up quickly. That's really one of the attractive parts about PayPal, and I think Square, too. They have a number of different ways to win, and they're helping dictate this 21st century money moving around. I think it's amazing to see how things have changed in such a short period of time.

Frankel: Yeah, definitely. It's also worth pointing out that it's not just Venmo and Square Cash person-to-person payments that are killing ATMs. Square's payment processing hardware is also killing ATMs. It's used at all these places that you used to have to get cash for. When I used to go to a festival, I would have to stop and get whatever me and my wife needed for food and drinks while we were there. Now, everyone takes cards through their little Square readers. Between the two trends, ATMs might really be on the way out.

Jason Moser owns shares of Square. Matthew Frankel, CFP owns shares of Square and has the following options: short December 2018 $90 calls on Square. The Motley Fool owns shares of and recommends Square. The Motley Fool has the following options: short January 2019 $80 calls on Square. The Motley Fool has a disclosure policy.