Money & Banking

With more innovations, ATM networks may see rebound in FY22

Surabhi Mumbai | Updated on October 13, 2020 Published on October 13, 2020

Amid rise in digital payments, the number of ATMs in the country may continue to decline until the end of this fiscal due to the consolidation of public sector banks and macro factors, including the economic slowdown, but could resurface with more functionalities in FY22.

ATM operators also remain hopeful of an increase in interchange fees, which, they believe, will be a boost to the sector.

“If the government and RBI want ATM infrastructure, especially in the rural areas, they will have to consider a hike in interchange fees,” noted a spokesperson of industry body Confederation of ATM Industry (CATMi), adding that there is sufficient infrastructure in urban areas, along with digital payments.

Anurag Nigam, Head of ATM-managed services, India and Philippines, FIS, also said an increase in interchange fee will act as natural incentive for some banks to deploy ATMs and will also help white-label ATM operators.

“Bank amalgamation cameinto effect this year and there are economies of scale, which will lead to some reduction in the number of ATMs. Also, there is some amount of pure play involved as many industries have closed down, so there will be some impact,” he noted.


However, with the concerns over branch banking during the current pandemic, Nigam said that there could be some innovations in terms of formats.

“From the first quarter of FY22, ATMs may become pseudo branches, not with 100 per cent functionality of branches, but at least a few more additions in their functions,” he said.

A large number of banks have already deployed mobile ATMs during the lockdown as an alternative for customers. Some banks are also working on options such as contactless ATMs.

While some banks and WLA operators have been adding to their ATM network, players said many banks are happy to let their customers use ATMs of other banks.

“A bank has to spend about ₹16 for a transaction on its own ATM but can pay just about ₹11.50 for its customer to use another bank’s ATM,” noted a player.

As of July this year, the number of ATMs in the country stood at 2.09 lakh against 2.06 lakh a year ago. However, in April this year, the number of ATMs was higher at 2.10 lakh.

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Published on October 13, 2020
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