HindustanTimes Sun,21 Dec 2014

India riding the ATM wave

Sachin Kumar, Hindustan Times  Mumbai, March 06, 2011
First Published: 21:45 IST(6/3/2011) | Last Updated: 22:00 IST(6/3/2011)

For the average Indian, ATM translates to Any Time Money. And the usage of ATM machines in the country is increasing by leaps and bounds, data from the National Payments Corporation of India (NPCI) has shown.


The number of installed ATMs or Automated Teller Machines increased by 29% to 69,324 in the 12 months from January 2010 to January 2011.

The amount of cash withdrawal has gone up by 142% to Rs. 27,655 crore in January this year from Rs. 11,429 crore in January 2010. Also the number of transactions that include balance inquiry and number of cash withdrawal has increased by 121%, touching R12.5 crore at the end of January 2011, the NCPI data showed.

One important reason for the increasing popularity of ATMs in India is the bouquet of services that they offer, say experts. It their early days, they were used only for withdrawing money, but today ATMs have turned into mini financial stores offering services like money transfer, mobile and electricity bill payment, income tax payment, cash deposit and even air ticket booking.

"ATMs are now no more related to banking only, they are now a payment gateway allowing customers to make payments for various services," M Narendra, chairman and managing director, Indian Overseas Bank, told Hindustan Times.

The rising use of ATMs is also an indicator that India is gradual progressing from its status of a developing economy. "Growing use of ATMs signifies the transition of Indian society from developing to developed economy," Narendra said. "In developed economies people carry less cash with them and withdraw money when they actually need it."

Psychology also plays a crucial role in favour of ATMs as customers in India want to see and feel financial transactions.

"Unlike developed countries where people are comfortable with online payments, a large portion of Indian customer wants to see their transaction happening. They want to 'feel and touch' the transaction," said Sachin Sondhi, leader, financial sector (banking), Deloitte Touche Tohmatsu India.

Also ATMs are now present in every nook and corner of the country and do not have the same security concerns that online banking has.

"Customers' trust of ATMs can be judged from the fact that many do not even verify the amount after withdrawing from the machines," says Sunil Udupa, president and chief executive officer of AGS Infotech, which supplies ATMs to many banks in India.

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