Chinese ATM market defies economic slowdown, sees record expansion

Last year also will go down in history as the year that China overtook Japan to become the world's second largest ATM market, behind the United States. Japan and the United States have been the two largest ATM markets since 1972, thirteen years prior to China even installing its first ATM.

The new report explains that one of the major contributors to the Chinese growth has been the transformation of the bank branch from a mere transaction point to a service outlet, thereby stepping up the pressure to migrate basic transactions to self-service. Moreover, the density of ATMs to population and branches remains relatively low in China, leaving plenty of room for yet further growth.

In addition to the continued role played by China's "Big Four" state-owned banks in driving growth, another sector of the Chinese ATM market has gained in significance in recent years: ATM Outsourcing Service Providers (AOSPs). ATM deployment and operation are subject to strict governmental regulation in China, and non-banks are not allowed to deploy terminals without a bank's involvement (and only under a bank's branding). To address these requirements a "co-operative deployment model" has evolved whereby banks outsource ATM deployment to AOSPs, and pay them a service fee and a share of transaction fee income. This segment has grown relatively recently, but already accounts for nearly 10 percent of the ATMs in the country.

These figures and insights are based on the new RBR study, "ATMs in China 2010."