White-label ATMs see red in under a decade

June 28, 2023

White-label ATMs (WLAs), set up and operated by non-banking entities, made their debut in India in 2013-14 with much fanfare. The Reserve Bank of India (RBI), pursuing its ongoing goal of financial inclusion, gave licences to eight players to set up and operate ATMs in predominantly semi-urban and rural regions.

Less than a decade later, the hype has given way to a more sombre mood, with half the players withdrawing from the business, weighed down by higher costs and lower fees.

The initial list of eight players included India1 Payments, Hitachi Payments Services, Tata Communication Payment Solutions, Vakrangee, Muthoot Finance, SREI, AGS Transact Technologies, and RiddhiSiddhi Bullions.

Four of them are no longer present in the segment. Srei was the first to surrender its certificate of authorisation (CoA) to the RBI in 2018, citing viability issues, and Muthoot Finance followed suit in 2021. The same year, RBI revoked the CoA of RiddhiSiddhi Bullions and AGS Transaction Technologies due to non-compliance with regulatory requirements to set up WLAs within established timelines.

The existing players have also not been able to scale up that fast. K Srinivas, CEO at India1 Payments, the largest WLA operator in the country with 12,124 ATMs, said banks have 222,743 machines as of March-end, while WLA operators have installed 35,791 translating into around 4,000 machines a year.