If the ATMs were opened somewhere about two decades ago, then that area was identified with ATM. Some would say, ‘My house is right in front of ATM’, some used to say ‘My shop is in the street with ATM’. Although even today, ATM is in the street. But now its identity is getting tarnished.
Digital revolution is a good thing, but in the changing times of technology, like people forgot PCO and STD today, perhaps ATM will not be forgotten in the coming years. When the tradition of the letter ended in the changing times, the existence of the post office was in danger, although several steps have been taken to keep the post office alive.
Actually, people have started liking digital transactions more since first demonetisation and then Corona. Now when the transaction in cash will be less, then why will people go to ATM? This is the reason that questions are being raised on the existence of ATM. However, ATM is also being upgraded to today’s date. Today, along with cash withdrawal, they provide services like deposit, fund transfer, bill payment and account information.
Let’s first take a look at the history of automated Teller Machine- ATM:
The first ATM in India was installed by HSBC in Mumbai in 1987. In the next 10 years, about 1500 ATMs opened in the country by 1997. If we talk about the first ATM in the world, a cash machine was used on 27 June 1967 in Enfield, London, which is recognized as the world’s first ATM. This ATM was started by Barclays Bank. During the 80s, ATMs joined the mainstream in many big countries of the world.
After this, in 1997, the Indian Banks Association (IBA) launched the first joint ATM network from the ‘Swadh’, which was operated by the India Switch Company (ISC). However, it closed in 2003. It was followed by the establishment of the National Financial Switch (NFS) in 2004, which is today the largest ATM network in India, which the National Payments Corporation of India (NPCI) operates.
Today there is so much ATM in India
As of January 2022, India had over 2,55,000 ATMs under the NFS network, including cash deposit machines and recycles. Based on data from Reserve Bank of India (RBI) and NPCI, India was estimated to be around 2,60,000 to 2,70,000 ATMs by 2023. Currently, there is a possibility of about 2.8 to 3 lakh ATMs in India. At present, there are 15 ATMs on one lakh people in the country. SBI is the largest operator based on the number and impact of ATM, but cash management dominates CMS.
How many ATMs have been closed in India so far …
According to RBI data, the number of ATMs in India was 2,19,000 in September 2023, which declined to 2,15,000 in September 2024. This means that about 4 thousand ATMs closed during this period. Not only this, since the year 2017, the increase in the number of ATMs has slowed down, and its scope has increased from year to year. Especially since 2022, the number of off-site ATM (located outside the bank premises) has steadily declined. This is due to increasing use of digital payments (eg UPI), high cost of ATM operations, and merger of bank branches.
Why are ATM closing?
That is, everything depends on the customers, if the ATM is used a lot, then the business will not run in losses, while if an ATM does 300-500 transactions in a month, then it can also go into losses. This bitter is true, the use of ATM in the country has decreased rapidly. Because most people are using digital payments (UPI), which also closed some ATMs. According to the RBI, in 2023, India had an average of 50–100 transactions per day, which ensures sufficient income for the operator.
There can be many reasons for ATM going into losses, which are associated with technical, economic, and social factors.
Methods of earning from ATM:
The use of ATM is decreasing due to digital transactions, so companies associated with it are running in losses. Actually, ATM earns in many ways, which depends on who is operating the ATM- bank, white-labeled ATM operator (Wlas), or a third party.
Where do you earn from where?
1. Interchange fee
When a customer withdraws money from the ATM of a bank other than his bank, his bank pays that ATM Honor (operator) a small fee. This is called interchange fee. According to the RBI, Rs 17 per cash withdrawal and Rs 6 per non-cost transaction (such as balance check) charge is paid to ATM operator. For example, if 1000 people use an ATM to another bank card in a month, then ₹ 17 x 1000 = ₹ 17,000 can be earned.
2. Service Charge/Surcharge
According to the RBI circular, customers get 5 free transactions from their bank’s ATM and 3 free transactions from ATM of other banks (in metro cities) every month. On more transactions, the bank charges charge from customers. Every transaction is charged 20 to 21 rupees.
3. Earning from advertisement
Apart from this, additional income can be made by showing advertisements on ATM screen or branding on the outer part of ATM. Some ATMs offer services like mobile recharge, bill payment, or mini statement, on which commission is available. It depends on the number of service and transactions, but is charged from 2 to 10 rupees per transaction. Apart from this, banks add cash to their ATM, which reduces customers to go to the branch. This saves the operating expenses (employee, time) of the bank. Although this is indirect earning, but it earns the banks, ie savings.
ATM Operations: Cost vs.
There is a loss in any business only when there is an amount of more cost than earning. Currently, something is happening with ATM business. There is more cost, but the income is decreasing day by day.
– 2-5 lakh rupees for installing ATMs. (Machine, software, installation)
– Maintenance: Spending from Rs 20,000 to Rs 50,000 every month on electricity, security, cash filling, and repair.
– If the ATM is at the place of fare, then the monthly rent of 10 to 20 thousand rupees.
Missing and cost of banks
After the merger of public sector banks, many banks are closing the additional ATMs present in the same area, so that the cost is reduced. Due to this, the total number of ATMs is decreasing or decreasing. But pressure on existing machines is increasing.
How does ATM operate?
ATM service and earnings in India depend on who is operating the ATM- bank, white-labeled ATM operator (WLAS), or a third party.
White-Lable ATM (WLA) model
In India, WLA operators like Tata Communications, Hitachi Payment Services and Vakrangee run ATM. These are not banks, but these banks deals and operate the ATM.
India 1 Payments: Earlier Tata was known as Communications Payment Solutions. It is the largest WLA operator in India, which has 10,000+ ATMs. Rural areas are more ATMs. Thousands of ATMs are operated under Hitachi Payment Services. It also provides technical and management services.
White label ATM operator (WLAOS) spent more than Rs 1000 crore to install more than 25,000 ATMs. But due to low transactions, they are also in loss. However, big banks like SBI are still able to make profit due to their huge network and market share.
AGS Transact Technologies: It is also a major WLA operator, which offers ATM as well as payment solutions. Whereas Vakrangee provides ATM and banking services in rural areas.
FSS (Financial Software and Systems): Manage the ATM network for many banks, including site selection, maintenance and monitoring.
Companies associated with ATM operating and cash management in India come in two different categories. ATM operators- ATM manages the network. Cash replenished companies- ATMs work in pouring cash. Some companies do both work.
Major companies operating ATM in India
State Bank of India (SBI): The largest ATM network in India is SBI, by 2023-24, there were 65,000 more ATMs in the country. SBI operates its machines itself and holds about 30% of the market.
HDFC Bank, ICICI Bank, PNB, BOB: These big private and public banks operate their ATM networks. They have thousands of ATMs, which are mainly for their own customers.
Major Cash Inserts (Cash Reporters):
CMS Info Systems: The largest cash management company in India is, which serves 2,55,000+ ATMs and business points. It works as a cash, maintenance and safety in ATM.
SIS PROSEGUR: Cash-in-Transit (CIT), ATM replenished and First Level Maintenance (BLM). It serves in all states.
The company started drowning due to decrease in ATM business
The ATM business has reached the verge of drowning due to losses in ATM business. All the big officials are resigning. The IPO of this company came in the year 2022, and till a few years ago the company had a great business. But for the last few months, the company is constantly struggling with the economic crisis. The shares of AGS Transact Technologies have lost up to 60 per cent in the last one month, while 90 per cent shares have fallen in a year, the stock has been continuously lower circuit for the last several weeks. That is, the company has been ruined financially. At present, the price of the share has fallen to Rs 7.