Why is interest such a bad thing?
1a – no, because who has more money, will get much more money. if all people will have 100$ and only one people will have 101$, probably he will become much-much richer then the all other people, after some time.
1b – 1) “ATMs, online banking, etc” – that could be paid as paying for job. 2) you are asking about interest wich are already taken from debtors, but you was going to ask about taking interest at all, also by bank from debtors.
2 – probably there are many more other effective mechanisms.
2a – investments are allowed. it is possible to buy stocks of companies and it is named investment.
2b – 1) people should decide by themselves where to put their money, to earn reward from god. 2) giving money (temporarily) without riba (interest) is also win-win, because people should not keep their money without usage, it is said in quran in sura 104: ” Woe to every scorner and mocker Who collects wealth and [continuously] counts it. “. > 2016-apr-14 : maybe, the reason, why wealth should not be collected, is that it was material objects in past, and it is better if they do not lay without usage. but nowadays wealth can be “virtual” – paper and electronic memory, so, maybe, they are more allowed to be collected. < 3a - if there would be no interest used in the world maybe inflation would become much smaller. and maybe equivalent value loan is allowed, see Is making an “equivalent value” loan in accord with Islam? .
3b – see 3a.
3b, 1b – and you should not expect that your money grows, or stays at same level just without work by you. if you would have something like sheep, they would require some work from you, and if you would have gold, more gold is mined after time and it can become cheaper, and also even if it is not so, but people become more and gold relatively less and more expensive, you have to do some work to keep your gold safe from robbers. and muslims should pay zakat from their gold and silver, 1/40 of their gold every year, if its amount is not too small, as i rememeber. (but i do not know, whether zakat should be paid from loan). and so, even if you just get what you loaned, back, after some time, it is a “win”/useful for you, if you could not other way manage/handle that money/wealth by yourself, i.e. , it is a way of saving your money.
also i have written about this topic nearly 10 years ago in tatar language in a latin script in http://qdb.narod.ru/yazmatxt/Acatniarttiripqaytaruw/Acatniarttiripqaytaruw.htm .