India is one of the world’s largest cash-driven economies. However, there is a substantial disparity between financial need and want with cash points and banks being mostly located in semi-urban and urban areas. Given that over 60% of the Indian population lives in rural areas, cash deposits and withdrawals can involve traveling long distances which can be highly inconvenient.
This is where the role of Micro ATMs comes into the picture.
Micro ATMs are an easy and convenient way to allow
customers to carry out essential financial transactions at the local level.
With the help of the AEPS verification, these POS machines empower retailers
and kirana store owners to conduct biometric-enabled transactions at their
| “Micro ATMs would particularly help address the problems that people are facing in rural and semi-urban areas where the ATM network is not as strong”|
Shaktikanta Das, Governor, Reserve Bank Of India
Micro ATMs are the next big game-changer in the way in the way we carry out transactions. In fact, in the initial 5 months of 2019, almost 145 million transactions had occurred through Micro ATMs against an overall transaction volume of Rs. 200 million in 2018. This incremental rise in the popularity of the POS solution can be attributed to 4 quintessential factors:
- Potential Reach And Flexibility:
Micro ATMs aim to bridge the gap between a customer and their financial needs. According to the RBIs data, there are 201861 ATMs in India. Of these only 40,000 odd ATMs are located in rural and semi urban areas.
The lack of banking infrastructure in these regions which are primarily high-cash economies results in a considerable supply-demand issue. That’s why micro-ATM penetration is growing so rapidly in these areas. As they are portable and easy to use, they go a long way in improving banking access for the underbanked.
Additionally, these POS machines provide a number of financial services including cash deposits, cash withdrawals, fund transfers and eKYC based saving account openings which make it a robust and efficient payment solution in sparsely populated regions.
- A Low-Cost & Accessible Alternative To ATMs:
The advantages of micro-ATMs in a digitized economy are many fold. Apart from its potential widespread reach, these POS devices can be easily installed and used at almost any location such as grocery and kirana stores making it easy and convenient to be used by customers. This was particularly evident during the lockdown period when estimates showed that during the period of April-May, nearly 1.13 crore daily AEPS transactions were carried out.
- Secure Transactions:
Micro ATMs work on a dual security verification method. The first is by using a unique Aadhar number of the customer and the second is by using a biometric/fingerprint scan or a registered mobile number. These are then fed into the Aadhar-Enabled Payment System(AEPS) for verification. This ensures safety and eliminates the possibility of fraud when cash is transferred between accounts.
| AEPS is one of the fastest growing payment solutions in the country having an annual growth rate of 150%. It is only 2nd to UPI in terms of growth rate. |
- Additional Revenue Streams:
Installing a Micro ATM facility can also help increase a business’s income with an additional stream of revenue. For every transaction, a fixed commission is processed into the store owner’s account depending on the distributor and the banks.
The availability of Micro ATMs, AePS (Aadhaar Enabled Payment System), and other services such as money transfer, bill and tax payments, etc. with a neighboring shopkeeper is a big savior for consumers looking for banking and payment services in their neighborhood. It truly is the future of cash transactions in India and around the world.