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India's ATM deployers consider adding noncash functionality to compensate for skimpy fees

May 2, 2017

India's banks and white label ATM providers are pursuing ways to increase the capabilities of their ATMs in order to increase their efficiency and return on investment.

According to a report by Money Control, ATM cardholders in some locations can already use the machines to pay bills or top up mobile phone minutes — and the country could begin to see an increasing number of terminals that offer such services.

"ATM operating companies such as like Diebold Nixdorf, NCR Corporation, CMS and AGS Transact are launching more intelligent ATMs with multifunction capabilities like bill payments for utilities, cash recycling, loan applications, loan repayments, cardless cash withdrawals, check encashment, mobile recharge and [direct-to-home satellite] top-ups … ," the report said.

In India, the number of ATMs as on February end 2017 stood at 207,000, up 5 percent from 2016.

The combination of low interchange fees of 15 rupees (23 cents) and a cash shortage resulting from the country's demonetization of 500 and 1,000 rupee notes in November have stunted the growth of the white label ATM segment in India.

The eight WLAs authorized by the Reserve Bank of India — AGS Transact Technologies; BTI Payments; Hitachi Payment Services; Muthoot Finance; RiddhiSiddhi Bullions; Tata Communications Payment Solutions; Vakrangee; and SREI Infrastructure Finance — collectively have set up only about 55 percent (13,793 out of 25,000) of RBI's target number of terminals.

According to Money Control, additional capabilities could bring with them greater fee opportunities and increased expansion incentive for WLAs.