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Tata Communications Payment Solutions that runs the Indicash brand of white-label ATMs as well as brown-label cash vending machines, feels the era of bank-run ATMs will soon be history as the industry has almost fully moved to third-party run operations mode.
The Tata Group enjoys over 60 per cent market share in the white-label ATM space with over 7,000 machines installed in 20 states, while its brown-label machines count over 13,000 as of now.
Out of these 7,000, as many as 4,000 are in fully unbanked areas. Together the company enjoys over 10 per cent market share in the 2 lakh ATM market in the country, out of which 1.9 lakh are brown-label machines.
The company’s white label ATM count nearly doubled in the past one year alone.
At present, there are 11,000 white-label machines installed by the three operators who got permission from the Reserve Bank to run such machines two years ago.
White-label ATMs are those run by companies like Tata Communications, Muthoot Finance and Prism Payment Services and are available for any bank, while brown-label machines are those owned and branded by banks, but could be operated and maintained by third party operators like Tata company.
“Since the past one year or so there has not been many contracts coming in from banks for installing ATMs, especially from the private sector players, which have not installed any single machine on their own. Even the government-owned banks are not doing any great numbers.
“And I feel if the trend continues, which is more likely than not, soon brown-label ATMs will become history. To me it seems that we will also soon be following the rest of the world in this regard”, Tata Communications Payment Solutions chief executive Sanjeev Patel told PTI in an interview here.
He argued that it makes no sense for a bank to install ATMs on its own now. For one, installing and running these machines on own is too costly for a bank.
Secondly, there are many other ways to build brands in this era, he said, adding on an average a white-label ATM costs just around Rs 5 lakh, while a brown-label one costs many times more as rentals play a big role in the cost.
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