As a consumer of a bank exactly where you hold your bank account, you of course get access to a host of services provided by the bank. While numerous are digital such as online banking, paying by way of wallets or debit cards, the human-machine interface comes into play when you go to withdraw money and avail of other services either from a bank or an ATM.
India has a much less than optimal penetration of bank ATMs. In reality, according to statistics more than the previous 5 years, whilst India is next only to China in terms of the money withdrawals from ATMs, India’s ATM penetration relative to population is one of the lowest amongst the emerging markets. India has 18 ATMs per lakh of population, compared to China (63), Brazil (81), Japan (107) & Australia (132). In India, much less than a fifth of the ATMs are in rural locations which translates into around 5 ATMs for just about every lakh citizens, thereby aggravating this challenge even additional. Under such situations, it is not far-fetched to say that the nearest ATM or bank branch might be really some distance away.
The government’s monetary inclusion system such as Jhan Dhan Yojana and Direct Benefit Transfers (DBT) have equipped most Indians with a bank account and a debit card and as the subsidies are distributed as money transfers in their bank account, more ATMs are expected in rural places as digital touch points to access this money and avail of a host of banking facilities in a secure and practical manner.
White Label ATMs (WLAs), operated by private non-bank organizations and licenced by the RBI, that concentrate mostly on semi-urban and rural places for ATM deployment can fill this gap, driving ATM penetration whilst contributing to monetary inclusion. White Label ATMs (WLAs) are operated by WLA operators. Additionally, what will give a increase to the market is the deployment of Cash Recycling Machines (CRMs) at WLAs and Cash Deposit Interoperability.
Simply place, Cash Recycling Machines allow each money withdrawals and money deposits in the exact same machine. With money deposit interoperability, a consumer of one bank can deposit dollars in other bank or WLA operated CRM applying his debit card or just by getting into his account facts. This leads to really a couple of positive aspects for the consumer, one of which is that the hunt for the elusive ATM of the card issuing bank is unnecessary. In reality, WLAs have got superior response contemplating low ATM penetration in semi-urban and rural places and with money deposit interoperability, it will additional drive comfort for prospects.
It’s a substantial boon to smaller retailers and other merchants who can deposit their day-to-day earnings at their nearest ATM or WLA, with out getting to either maintain physical money in their establishment or commit unproductive time in depositing them at a far-away branch.
With the raise in WLA deployments, the deployment of CRMs at WLAs and with money deposit interoperability, the ATM penetration levels in the nation specifically in rural and semi-urban regions will boost additional, enabling uncomplicated access to money and a host of banking facilities for the financially underserved. This will also assist and help the government in attaining its monetary inclusion vision.
(By Rustom Irani, MD and CEO, Hitachi Payment Services)