How UAE ATM Managed Services Market Is
Positioned?
UAE
ATM managed services market witnessed growth due to increase in ATM
penetration, increase in value and volume of ATM withdrawals and improved liquidity
in the market from 2013 to 2018. The total number of ATMs have increased from
2013-2018 at a CAGR of %. The market is currently concentrated to one company
in managed services and two companies in ATM supply. Profitability associated
with ATM managed services is highly correlated with factors such as branch
expansions, introduction of new breed of ATM machines such as cash recyclers,
multifunction ATMs & biometric ATMs, improvement in customer retention
schemes, maintaining recurring clients by exceeding the service level agreement
and having diversified services portfolio offered by well trained professionals.
Currently, ATMs operate as cost centres in UAE as Banks incur losses. UAE ATM
Managed Services market has grown from AED ~Million in 2013 to AED ~Million in
2018, at a CAGR of ~%. ~, ~ and ~ are the three main players in ATM Managed
Services Market. The ATM Supply market has been analyzed to be AED ~ Million in
2018.
The number of ATMs in UAE has increased
to ~ as of 31st December, 2018 from ~ as of 31st
December, 2013 experiencing a moderate YOY decline of ~% during 2017-2018. The
growth in ATMs can be attributed to an increase in bank branches, from
2013-2016. Thereafter, a slowdown in growth of ATMs was witnessed due to
declining bank branches.
Similarly, the number of bank branches
has decreased from ~ in 2013 to ~ in 2018. This decline in bank branches was
witnessed due to merger of major banks which led to reduction of branches and
ATMs to reduce costs. Total cash in circulation has increased AED ~ Billion in
2013 to AED ~ Billion in 2018.The value of transactions through ATMs has
increased from AED ~ Billion in 2013 to AED nearly AED ~ Billion in 2018, at a
CAGR of ~%. The volume of ATM transactions have increased from ~ Million 2013
to nearly ~ Million in 2018, at a CAGR of ~%.
UAE
ATM Managed Services Segmentation
By Location (Off-Site and On-Site ATMs)
In Off-site ATMs, the right of
ownership of the ATM machine remains with the banks and rest other management
services such as cash replenishment, transaction processing, first and second
line maintenance, site maintenance and security are being outsourced to the
managed service providers. Generally, in UAE, banks outsource their off-site
ATMs managed services to single or multiple vendors as it makes their margin on
profitability higher. ATMs which are operating under this category generally
deployed where there are no bank branches.
By Type of Services (Cash Management, ATM Maintenance, ATM
Supply)
Cash management services have contributed the
highest share in the ATM Managed Service category in UAE. Transguard has a near
monopoly over the cash management services for banks in UAE. Brinks Cash
Logistics is a far second competitor with a % market share. Cash management
companies charge approximately AED for Off-Site ATMs and AED for On-Site ATMs
on a monthly basis for providing a bundle of services including cash
replenishment, CIT, cash processing, cash vaulting, etc. However, the final
cost depends on the basis of number of trips, location of the ATM, number of
ATMs replenished, among others.
Snapshot
On ATM Supply Market Of UAE
The revenue from ATM Supply market in UAE
amounted to AED ~ Million in the year 2018, with sales of about ~ ATMs during
2018.
Competitive
Scenario Of UAE ATM Managed Services Market
The market in the ATM Supply Market in
UAE is completely concentrated between two companies, NCR and Diebold Nixdorf.
NCR is the market leader in UAE followed by Diebold Nixdorf. Two manufacturers
Diebold and Wincor merged to form Diebold Nixdorf. There are two major companies
in UAE supplying ATM Machines namely NCR and Diebold Nixdorf. NCR is the market
leader in the ATM supply segment with a ~% market share while the remaining ~% &
share is held by Diebold Nixdorf.
Companies operating into ATM supply
segment compete on the basis of following factors. Pricing of the ATM is the
major factor that distinguishes vendors from each other. In UAE, banks
generally buy ATM machines once or twice a year in bulk. The machine comes with a warranty of ~ year. Charges for second
line maintenance and first line maintenance are waived off during this period.
The average life of an ATM machine is expected to be ~ years. A basic ATM
machine generally cost AED ~.
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