NCR Corporation, the NYSE-listed $5 billion, as of December 2008, data processing and automated teller machines (ATMs) maker, is thinking of using emerging markets like India as a test-bed for global roll-outs. With a 50 per cent share of the Indian ATM market and 85 per cent in cheque processing and payment solutions, the 125-year-old company — which rolled out its 25,000th ATM from its 120,000-sq-ft manufacturing facility at Puducherry recently — says it also sees huge opportunity in the inclusive banking programme that the Reserve Bank of India has laid forth. In an interview with K Rajani Kanth, NCR Corporation’s Managing Director (India, Nepal and Sri Lanka) PRADEEP SEN outlines the company’s road map for India, including its plans to scale up its research and development (R&D) efforts, manufacturing capacity expansion and taking the partner-ecosystem route to penetrate the petroleum and general retail segment. Excerpts:
What is the current manufacturing capacity of your Puducherry facility? Are there any plans to beef it up?
The Puducherry plant runs on the ‘make-to-order’ concept and can manufacture 1,200 machines a month, both for the domestic market and exports. ATM deployments in the last couple of years have been substantial and the product requirement from overseas has gone up. The capacity at this plant has been stretched and we need more headroom. Hence, we have taken more space to start a new line of products. The expanded project will go onstream by the end of this calendar year.
With Indian banks expanding their self-service networks aggressively, has NCR Corp lined up any new products to cash in on the demand?
We are already piloting the ‘NCR EasyPoint 70’, a micro deposit solution with smartcard and biometric technology targeted at low-income wage earners, which will enable banks and micro-finance institutions to scale up their services. The idea is to use India as a test-bed — test this product in the toughest of conditions, make it successful and take it to other countries like Brazil and to remote places in the US. More such products will be rolled out globally, from India through this model.
Currently, we are focusing on our teller cash recycler, which was launched a week ago. The financial sector in India tends to be more conservative and it will take a while to adopt such technologies. Over the years, we have learnt the game of patience and, at some time, the market will pick up.
Will you expand your R&D workforce here?
While we have a 600-strong R&D team at Puducherry, the Hyderabad centre today houses 200 professionals, working on technologies which are being used elsewhere. India is a place where supply of talent pool is abundant and we plan to have our base close to the market to understand it better and create solutions. The Hyderabad centre will focus on creating technologies for India, including the areas of payments, and the team here will be scaled up to 500 over time.
What is the potential that the financial inclusion programme holds for companies like the NCR Corporation?
Indian banks, basically, are safe players. However, to be better than others, they need to spend on deploying technologies. The choices in front of them to reach out to more customers are only two — putting up more ATMs or increasing their branch networks. And, the latter option is more expensive. All banks are being pushed towards inclusive banking. Technology plays a key role here and NCR is on top of it. Today, India has 48,000 ATM deployments — 23 ATMs per million — which is less in terms of penetration. According to an Asia Bank research, 100,000 ATMs would come up in India by 2013. We are ready with the product (EasyPoint) and we will be part of the inclusive banking programme in terms of roll-outs.
NCR had forayed into the Indian retail segment in 2006. What has been the progress so far?
Today, we are leaders in petroleum retail automation, with deployments at 1,000 wet stock sites of our clients,Hindustan Petroleum and Bharat Petroleum. There is a thrust from the government to integrate fuel dispensing and billing for ensuring accurate quality and quantity. We don’t want to stretch ourselves too thin and, hence, will go with partners to work with other petroleum companies.
On the general retail front too, we will go along with multiple vendors and, hopefully, will start working with the partner-ecosystem from this year end.
Where does India stand when it comes to contribution to NCR’s global revenues?
When it comes to India, the growth seems more interesting than figures. India is overtaking other South-East Asian countries.