How ATM
Manged Services Market Is Positioned in India?
Traditionally, people in India used to be highly dependent on local
money lenders and public sector banks for withdrawing cash or for taking up the
loans for fulfilling their cash requirement. After introduction of private
banks such as HDFC, UTI (Axis Bank), ICICI and IDBI bank, these banks have
started expanding their ATMs since the year 1994. Currently ATM management
services market is at a developing stage. India
ATM Market is moderately fragmented among top 6-7 players which
constituted ~% of the revenue share though there are number of smaller players
existing in the market. Indian government during August, 2014 has initiated the
scheme of opening up of bank account at zero balance under Pradhan Mantri Jan
Dhan Yojana (PMJDY). This led to expansion in the number of transactions
performed in an ATM as debit card users in India increased significantly. India ATM managed services
market size in terms of revenue has increased from INR ~ million in FY’ 2013 to
INR ~ during the year FY’ 2018.
RBI passed the law to increase the penetration of ATMs in rural areas
of India to meet the desired aim of financial inclusion which further supported
the growth of ATM managed service market. Over the span of last five years, the
number of ATMs installed has increased by ~ ATMs from ~ as of 31st
March 2013 to ~ as of March 31st 2018. As of 31st March
2018, approximately ~% of the ATMs are being outsourced by the banks as Banks
observed that outsourcing an off-site ATM is much more cost effective instead
of managing them by the banks. It is clearly witnessed that banks have been
increasing the number of ATMs which they outsource to MSPs, which has been
counted as primary reason for increase in revenue garnered by ATM managed
services market.
Government announced demonetization of currency in November 2016 under
which old currency notes of value INR 500 and INR 1,000 were ceased to be the
legal tender. This led to shortage of currency circulation in the economy and
impacted ATM managed service market. The currency in circulation as a
proportion of GDP during FY’2017 has came to its lower level of ~% in FY’2017.
Which type of ATMs Is largely
Operating in India?
In India, there are four types of ATMs which exist for the management.
These are namely Managed Services, Brown label ATMs, ATMs managed by banks and
White label ATMs. Majority of ATMs are from managed services which were
recorded at ~ ATMs as on 31st March 2018. However, Brown Label ATMs
has been recorded as ~ in numbers as of 31st March 2018. These ATMs
are owned by banks and further deployed to ATM management companies for their
management.
As of 31st March 2018, ~ ATMs are entirely owned and
managed by banks which are less as compared to number of brown label ATMs
operated in India. On the other side, penetration of White label ATMs in India
is quiet low as compared to other ATMs operating in the market as only ~ ATMs
are installed in India as of 31st March 2018.
White label ATMs in India have their penetration majorly in rural
areas as government is encouraging non banking entities to open white label
ATMs in rural areas to reduce the shortage of ATMs and financial services in
rural areas of the country. It was recorded that as of March 31st
2018, ~ White label ATMs exist in rural centers, ~ WLAs in semi urban centers, ~
in metro centers and ~ in urban centers.
Which Type of ATM Machines IS
Operating in India?
In India, ATM machines are primarily of two types which are Cash
dispensing machine (CDM) and cash recyclers. Currently, cash recyclers are
directly managed by banks while in the future it is anticipated that banks will
outsourcing management of cash recyclers too. Cash dispensing machine have dominated
the number of ATMs as they have high percentage share as compared to number of
cash recycler machines recorded at approximately ~% as of 31st March
2018. Presently, total number of cash recycler machines operating in India was
evaluated at ~ as of 31stMarch, 2018. However, number of cash
dispensing machines operating in India has observed to be ~ as of 31st
March, 2018.
Majority of the ATM cash recycler machines has been observed in the
Metro cities and urban areas as people are using these ATMs to save their time
in reaching out to a particular bank branch and standing in a queue to deposit
the money. However, cash recyclers are not widely present in rural areas owing
to limited know how of the machines. Major players in the market which
manufactures the CDM are NCR Corporation, AGS Transact, Diebold, Vortex
Engineering and others.
What are the major Services which are
Provided by MSP’s?
ATM managed services market incorporates various services such as ATM Site
Management, Cash management services, Transaction processing, ATM supply, ATM
repair and maintenance, Cash Reconciliation Statement and Content & Electronic
Journal Management.
ATM Site Management and other services which include services such as
(payment of rent, man guarding, network services and services such as ATM
deployment, management and operationalization of ATM) has dominated the market
in terms of revenue which was reported at INR ~ million during FY’2018. This
was followed by cash management services with revenues of INR ~ million in FY’
2018. However, other services (Transaction Processing, ATM supply, ATM repair
and maintenance Cash Reconciliation, Content & Electronic Journal
Management) contributed revenue of INR ~ million during FY’ 2018. ATM repair
and maintenance has contributed 5.6% share in the revenue generation in the ATM
managed services market in India. The least amount of revenue is generated
through content and electronic Journal management services as banks generally
manages these services on their own.
Snapshot on India Cash Management
Services
The current cash management cycle involves cash pick up from bank,
cash movement from the bank to the ATMs’ locations, grading, counting,
monitoring ATMs for assessing the level of cash in an ATM, and replenishing
cash in the machine accordingly. India cash management services market has
increased at a CAGR of ~% during the period FY’ 2013 - FY’ 2018. Market
attained significant growth during the period FY’2013 - FY’ 2016 due to
increase in services offered by the cash management companies such as cash
vault services, bullion management, cash processing and others. However,
Demonetization has led to decline in currency circulation in the country from
INR ~ billion in FY’ 2016 to INR ~ billion during the FY’2017, majorly due to
cessation of INR 500 and INR 1,000 currency as a legal tender, which further
lead to shortage of cash in the economy. This has negatively affected the
profitability of cash management companies as majority of the ATMs remained out
of cash during the period of demonetization.
Major services offered by the cash management companies include ATM
replenishment, CIT, RCM or CPD. Cash management companies also provides other
services such as transportation of jewels, bullion, other valuables, artwork,
cash processing and cash vaulting services to its customers.
What is Competitive Scenario
in India ATM Managed Services Market?
The competition stage of the ATM Managed Service market is moderately
concentrated with banks and other non- financial entities following a policy of
having at least two vendors for the management of their ATM centers and
simultaneously having the best combination of technology and cost efficiency.
There is a surge in the demand for ATM Managed Services over the past few years
as the banks are now consistently focusing on being competent in their core
services and outsourcing ATM related services to ATM Managed Service Providers.
Hitachi Payments, Tata Communication Payments Solution, Electronic Payments and
Solutions, AGS Transact, Fidelity Information Services, Financial Software and
Systems are the major players in the industry. The market is dominated by
Hitachi Payments with a share of ~% followed by AGS Transact at ~% in terms of
revenues during FY’2018. However, the market for ATM Supply and deployment
companies is highly concentrated with few players constituting more than
two-third of the total share. Most of the players in the market have entered
into strategic tie-ups and partnerships with foreign companies in order to
reduce the cost of manufacturing or to provide other value added services to
their clients.
What Is The Future Outlook For India Atm Managed Services Market
Over the forecast period, ATM managed services market is estimated to
grow at a CAGR of ~%, as it is anticipated that a higher proportion of
population will become banked. The revenue generated by the end of FY’2021 is
expected to be over INR ~ billion. The revenue is expected to increase
throughout the period as the country will benefit from the implemented schemes
of Financial Inclusion and Jan Dhan Yojana coupled with the increasing
awareness among the population of semi-urban and rural areas for the usage of
ATMs.
There will be an increase in the demand for Managed Services owing to
the increase in the number of ATMs in the country especially in the rural and
backward areas. The outsourcing of cash recyclers in the future by the banks
will give these MSPs another tranche of revenues, hence supporting their growth.
The market scenario is also expected to change from being moderately
concentrated to being fragmented with the introduction of new players in the
market such as SFBs, Payments bank and White Label ATM Operators.
Key Topics Covered in this Report:-
India
ATM Managed Services Market
Brown
Label ATMs in India
Portable
ATMs Market India
Cash
Management Market India
Outsourced
ATMs in India
Number
of ATM Transactions India
ATM
Managed Services Revenue India
White
Label ATMs in India
ATM
Replenishment Market India
Electronic
Journal Management Market India
Cash
Reconciliation Market India
Cost
to Set up ATMs in India
India
ATM Market Trends
Investment
India ATM Services
Penetration
ATMs in Rural Areas
India
Banking Industry
Underbanked
Population in India
Unbanked
Population in India
Global
ATM technology trends
Tender
Bid Process ATM Managed Services
Cash
Withdrawals in India
Impact
of PMJDY on ATMs
For more information on
the research report, refer to below link:-
Related Reports:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Sales@kenresearch.com
+91-9015378249
