Not SBI, ICICI or even HDFC - this bank has the most number of microATMs in India

• Micro ATMs were the fastest growing payment infrastructure in FY22, according to a report by ICICI Securities.
• MicroATMs are portable devices that allow banking transactions including cash deposit, withdrawal and fund transfer using debit or RuPay cards.
• Interestingly, while digital payments have been growing fast, cash circulation has also risen to 14% in FY21 from 8% in FY17.

While quick digital payments through apps like Google Pay, Phone Pay, PayTM led by UPI are growing rapidly, interestingly, cash in circulation too increased in the last couple of years.

Within various withdrawal instruments, micro ATMs were the fastest growing payment infrastructure in FY22, according to a report by ICICI Securities. In fact, the deployment of micro ATMs outpaced the growth in cards, ATMs.

“Lower commercial viability, especially in rural India, and increasing acceptance of mATM, resulted in most players opting for building mATM network over traditional ATM,” said the report.

Cash withdrawals through micro ATMs grew 33% to ₹285 billion as of April 2022. Meanwhile, micro ATM deployment jumped by a strong 93%, followed by prepaid cards at 45%.

What is a micro ATM?
A micro ATM is like a mini version of an ATM. MicroATMs are portable devices that allow banking transactions including cash deposit, withdrawal and fund transfer using debit or RuPay cards.

4 year old Fino Payments Bank is the dominant player in the industry
Fino Payments Bank, which calls itself the ‘digital banking partner’ for hardworking Indians, is the most dominant player in mATMs with a 38% market share in total deployed devices. It is followed by Mauritius based lender SBM Bank India with a 23% market share.

Fino’s share in micro ATMs is more than that of the top 16 banks like HDFC Bank, SBI, Kotak, IDFC.

Yes Bank however has an 11% market share in this space — and the only top tier bank to tap this opportunity.

“SBM Bank of India, Yes Bank, NSDL Payment Bank and City Union Bank have been aggressively tapping the mATM space since the past 12 months,” the report says.

Micro ATM transactions stood at ₹3 trillion growing by 18% in FY22. Micro ATM device networks grew at a robust 70% CAGR, while at the same period ATM networks grew by a muted 3% since March 2020.

“Notably, unlike the credit market, fintechs and relatively small banks like Fino SBM Bank India, NSDL Payment Bank, and City Union dominate the mATM space. Cumulative market share of top-5 players stood at 82% as on April’22,” said the report.

Cash remains an important mode of payment despite growing digital payments
While digital payments are increasingly becoming popular, cash too remains an important mode of payment in day-to-day transactions.

Data shows that in the US and South Korea, cash in circulation (as a % of GDP) increased to 9.5% and 7.6%, respectively, in 2020 (from 7.6% and 5.2% in 2015). Malaysia and Thailand, too, have witnessed an increase in cash in circulation.

India is second in terms of highest ‘cash in circulation to GDP’ ratio as of 2020, followed by Thailand, Russia and the US.

“Due to the pandemic, cash withdrawals in India declined by 13% to 28.9 trillion in FY21. However, with economies returning to normal pace, low-value cash transactions are expected to rise again,” said the report.

India remains a cash economy, which is why cash in circulation to GDP touched 14%, higher than pre-demonetisation level. However, nearly 47% and 40% of households do not have access to bank branches and ATMs, respectively, within 2 kms of their homes.


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