A white-label ATM is one that is owned and run by an NBFC. While the vast majority of white-label ATMs will be deployed in rural areas, a limited number will be installed in urban and semi-urban areas. Vakarangee, for example, has a three-year deadline to install a minimum of 15,000 white-label ATMs with a rural-to-urban ratio of 2:1. In metros and urban markets, Tata Communications Payment Solutions (TCPSL) will install nearly 5,000 of the necessary 15,000 ATMs. According to the RBI, more ATMs are required in the region, so seven non-banking financial companies (NBFCs) have been given permission to open white-label ATMs to help with financial inclusion. There are effectively several options to use the commercial space to gain additional income through the white-label ATM route in urban and semi-urban areas.Getting an ATM franchise is one way to make the most of your commercial space. TCPSL, in association with Franchise India, has introduced this concept. People will spend money in an ATM franchise and profit from it.
Any cash withdrawal will earn a franchise Rs 15 and non-financial purchases will earn Rs 5. The amount of footfall produced at the ATM determines the return on investment. The return is determined solely by the amount of transactions made at a certain ATM. With a rising population in all Indian cities, the demand for ATMs is growing as well, as having basic access to financial services has become a must. The RBI recently granted permission to 7 NBFCs to open white label ATMs. White mark ATMs are those that are operated and managed by non-banking financial institutions (NBFCs). The RBI has required all participating NBFCs to open a minimum number of white label ATMs, with the majority of them being located in rural areas with only a few in semi-urban and urban areas.
Cash remains the preferred and for many the only means of payment for India's population of over 1.3 billion people, especially in semi-urban and rural areas. While the amount of debit cards issued has risen exponentially in recent years, the number of ATMs has not kept pace, posing a challenge for banks and inconveniencing customers. When it comes to ATM penetration, India lags behind other markets. There are 18 ATMs per lakh people in India. The RBI had approved the launch of White Label ATMs (WLAs) to improve financial inclusion and accelerate ATM penetration in the country. WLAs enable private non-bank companies to set up and run their own brand of ATMs in the country. A non-bank company with a net worth of at least $100 million may apply for a WLA licence. The main goal of allowing non-banks to operate WLAs was to increase the number of ATMs in semi-urban and rural areas, especially in Tier III to VI areas where the bank-owned ATM network was stagnant.
More ATMs are required in rural areas as part of the government's financial inclusion programmes, such as the JanaDhana Yojana and other Direct Benefit Transfers (DBT). Since customers collect government incentives in the form of direct cash payments to their bank accounts, ATMs are a critical point of contact for quick access to cash. White Label ATMs, in essence, will provide much-needed facilities, complementing a variety of government programmes. A rising economy and the demand for financial services would place enormous strain on the banking system, making it unsustainable at its current infrastructure level. In order to convince customers in smaller towns and cities to follow multiple payment mechanisms around the board, the ecosystem must invest in further improving technology and informing consumers. With related infrastructural developments , the potential of the white-label ATM industry is projected to grow multiple folds.
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