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India's TCPS says rural ATMs can be viable

India's largest independent deployer says it has developed a strategy to make village ATMs pay based on as few as 70 transactions per month.

April 28, 2015

In April 2012, the Reserve Bank of India issued guidelines for its new policy allowing white label ATMs. Three years later, many of the companies granted WLA operator licenses by RBI are still finding it difficult to work out a business case that meets the government's requirements to extend service to unbanked rural areas and manages to provide some kind of operating profit.

But according to a report by Times of India, Tata Communications Payment Solutions Ltd., India's largest independent deployer, believes it can make rural ATMs pay based on as few as 70 transactions per month by lowering costs, adding the capacity for other types of transactions and pursuing economies of scale.

"In these locations rentals are lower," TCPS CEO Sanjeev Patel told ToI. "[Cost] can be brought down further by using the shop-in-shop model. We have also entered into alliances with state transport corporations."

Patel said that machines in "dark areas" where organized media outlets were nonexistent can provide attractive broadcasting opportunities to would-be advertisers.

"A whole lot of advertisers in tier three to tier six use the ATM rooms, the screens and the lead-capturing feature at the ATMs," he said.

According to ToI, TCPL now has a base of 5,000 WLAs operating under its Indicash brand, and plans to roll out another 10,000 within the next few years. The company also owns 18,000 "brown label" ATMs that it operates on behalf of retail banks.