More than nine months after demonetisation of high-value currency notes, the business and use of automated teller machines (ATMs), once thought to be a vital component of the banking industry, is plateauing.
According to a recent Economic Times report, the number of debit card transactions on ATMs has slumped to around 660 million a month from over 750 million before demonetisation. The number of ATMs, the report says, is stagnating around 2 lakh and shown hardly any growth in the past six months.
The report also added that only three out of around eight non-banking institutions deploying ATMs have put up a reasonable number of machines.
An earlier report in the Economic Times had indicated that the rate of ATM expansion in the country halved in the November 2016-April 2017 period, just when cash demand was peaking. Banks added 3,619 ATMs during this period, down from 7,746 in the corresponding period of 2015-16.
Among the most import reason for this emerging trend is the widening reach of smartphones and point-of-sale (PoS) terminals, which is making cash less relevant.
Credit and debit card transactions on PoS terminals have ‘increased stupendously’ latest Ecoflash report released by the State Bank Of India had pointed. The report says demonetisation has pushed the country at least three years ahead in the realm of digital payments in just seven months.
From 1.5 million PoS terminals in June, the number has jumped to to 2.7 million in June. Mobile banking transactions surged to 390 million in 2015-16 from 53 million in 2012-13, the report says.
Technological development in payments, including the advent of phone wallets, has also had a major impact on the growth of ATMs.
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