In ATM Future Trends 2012, a study cosponsored by ATM Marketplace and the ATM Industry Association, manufacturers said that by 2015, India would be second only to China as the most popular country for new and replacement ATM installations.
Considering events just a few months after the Future Trends 2012 survey closed, though, it seems that India might even trump China as a deployment locale. There are two reasons why:
1) In April, the Reserve Bank of India moved to allow white-label ATMs. This opened the Indian market wide for new deployments, something China has yet to allow;
2) China now has about 3.5 times as many ATMs per capita as India has, which means that India might have even more room for growth than China.
All the international ATM manufacturers — Diebold, GRGBanking, NCR Corp. and Wincor Nixdorf — have a presence in India. Recently ATM Marketplace got Wincor's perspective on India's booming ATM market in an email exchange with Sathyan Gopalan, managing director for Wincor Nixdorf India Pte. Ltd.
ATM: Let's start with some background on your presence in India.
SG: Along with our partners, Wincor Nixdorf addresses a large portion of the banking market in India … We belong to the top three suppliers, with more than 20 percent market share. Given the large geography of India, it is very important to have a wide service network. Therefore, the service network for Wincor Nixdorf ATMs is available across the country and is delivered primarily through our strong service partner network.
ATM: What will the RBI's decision to permit white-label ATMs mean for manufacturers?
SG: If new white-label operators are given the go-ahead to set up operations, the potential number of ATMs installed in India could grow more rapidly than previously forecasted.
ATM: What kind of potential does the Indian market really have?
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SG: At a macro level, the sheer geographic size and the potential to add the unbanked population into the banking mainstream means huge potential, but this will not happen overnight.
Per [research firm] RBR and National Payments Corp. of India estimates, the present ATM installed base in India is approximately 100,000 ATMs. The projections are that this could increase to 200,000 over the next three years.
ATM: Are electricity and connectivity problems in some areas of the Indian market?
SG: As the installations of ATMs proliferate into smaller towns and rural areas, electricity and connectivity can be problematic, although the infrastructure is improving. In some very remote areas, some banks have discussed and are exploring the potential for solar power; however, this is still at an experimental stage.
ATM: What cash-handling challenges does the market present?
SG: As banks grow their respective self-service capabilities into smaller towns and rural areas, the challenge is to ensure the quality of notes is maintained. The biggest operational difficulty for vendors and cash-in-transit is handling damaged or soiled notes, but there is work going on across the industry to improve this.
Of course, as banks penetrate further into rural areas, cash replenishment and security presents an additional hurdle to overcome, given that specific locations in Indi are at a nascent stage in terms of basic banking services. This is an area where Wincor Nixdorf is working with various parties to offer advice and guidance as to how to improve services.
ATM: What types of machines are most in demand?
SG: The large part of the requirement is for cash-dispensing ATMs as a result of pent-up demand from consumers. The market for deposit automation is in its early stage but is projected to gather speed in the next two years. Banks are still exploring the deployment of multifunctional ATMs, and introduction of such systems will have to go hand-in-hand with educational campaigns to inform consumers of the benefits.
ATM: How big a factor will the deployment of ATMs be in bringing Indians into the banking system?
SG: India is taking a holistic approach to embracing many unbanked or under-banked into the mainstream system. That means developing the infrastructure needs, such as electricity, connectivity and cash handling around the country.
This is a step-by-step process. But as the country develops at speed, it could mean that deployments in rural areas and small towns could expand rapidly and bring a large number of additional citizens into the banking system.
ATM: What special security measures are required in the Indian market, if any?
SG: Physical security measures such as guards and caretakers, surveillance cameras, machine grouting, etc. are already prevalent. Banks are considering DVSS (digital dideo surveillance systems) solutions to provide additional security plus additional measures to protect ATMs from skimming, network, virus and access breach attacks.
ATM: Has Wincor Nixdorf developed products or processes to cater to the Indian market?
SG: Wincor Nixdorf was among the first vendors to develop, implement and offer solutions to the Indian market for:
- Non-cash transactions such as kiosks
- Cash deposit systems localized for Indian currency and recycling capability, self-service terminals and automated teller safes. (An important feature for cash recycling is to provide serial number tracking and tagging of a particular transaction, and this is something we are working on for India.)
- Agent based monitoring/management of multi-vendor ATM systems
- Real time managed services to monitor banks' ATM networks
- Multivendor PC/E software suite to enable banks to execute value-add applications on ATMs (such as mobile transactions).
ATM: What is the key to success in India for the ATM industry?
SG: Success doesn’t rely on a single attribute. However, the ability to manage country-wide, large scale ATM installations in a cost-effective manner will be one of the key elements to success, as is the bringing to market of value-add solutions that can be tailored to particular India market requirements.
For more on this topic, visit the manufacturers research center.
Photo: Flickr/Unlisted Sightings