Rediff.com ran a story on RBI allowing yes bank and UTI to launch co-branded ATM. As a consumer how does it effect one and secondly as a business what scope of opportunity does it open businesses.
We all have been using ATM’s for a while now and understand its working. Very basic if you use your bank atm their is transaction fees or no fees based on type of account maintained. If you use some other banks ATM to withdraw cash you need to pay more transaction fees. Some time keeping in mind hassles and lack of availabilty of own bank ATM you tend to use other bank’s atm to withdraw cash. In other countries outside india its a full fledge business for smaller banks to cut down on their running expense for ATM network to become bank end providers as white label service providers and let non-banking entities manage ATM setup,installation and maintainance cost.
Keeping this in mind lets look at opportunity this sector hope to provide. At the rate which bank account penetration is increasing in india keeping in mind requirement to maintain bank account for various types of transactions the industry is going to grow. Hence mass base is available for the services. Secondly with concept of shopping malls hitting india it would not be possible for all banks to have ATM’s located in every shopping mall hence another space of opportunity. Cash less transaction will became way to go forward and with RBI policy making banks participation in program necessary it brings sense of reliability for consumers also sense of process for organizations with access to banks cash corpuses.
This brings down level of investment for non-banking entity to space and capital expenditure requirement for ATM machine and network maintainance.
Possible suitors for such sector are : Reliance Capital, Essel Group (ITZ Cash), Bharti