News

Is India 'just so over ATMs,' already?

August 16, 2017

ATMs are "fast losing importance" in India, a recent report in Economic Times reported. And it backs up this statement with statistics: Hitachi Payment Services, which operates white label ATMs under the "MoneySpot" name, has removed half of its 700 outlets over the past year.

Out of eight white label providers granted permits to operate in India, only three have installed a meaningful number of units — 10,000 in all — and are incurring losses due to the combined forces of banknote scarcity following demonetization of 500 and 1,000 notes in November and reduced interchange fees imposed by the country's central bank.

And India's total base of ATMs, which leapt from approximately 100,000 machines in 2012 to 200,000 in 2015, has shown little expansion since demonitization.

That's not surprising in light of statistics cited by the Times that show a drop in transaction volume from approximately 750 million per month predemonitization to a current total of approximately 660 million.

According to the Economic Times, the chief reason for this is a rapid uptick in POS installations (from 1.5 in November to 2.7 in June). Mobile banking transactions have seen even greater growth — from 53 million transactions between 2012 and 2013 to 390 million between 2015 and 2016.

K. Venkataraman, chief executive at Karur Vysya Bank, told the Times, "The demand for ATMs in the long run, we expect, could be less as people shift more to the digital channels and cash [use] may be coming down."