White-label ATMs get a fresh lease of life

White-label automated teller machines (ATMs), which have been growing at a slow pace, are set to get a fresh lease of life with payments and small finance banks exploring options for tie-ups with them rather than having their own cash dispensation machines. This will help the niche banks keep their operating expenses under control.

The Reserve Bank of India (RBI) has granted payments banks licence to 11 players and 10 applicants have been given the licence for small finance banks. Since these new players, especially the payments banks, will be working on wafer-thin margins, they are likely to collaborate with white-label ATM, or WLA, players to ensure they work on a low-cost model.

The tie-ups have already begun. FINO PayTech, which has a payments bank licence, has already tied up with Tata Communications Payments Solution for ATMs.

Sanjeev Patel, CEO, Tata Communications, explained that going forward, such tie-ups would increase. "Various payments banks have showed interest in exploring such tie-ups as it is mutually beneficial. We already have the infrastructure and the expertise in the ATM business and so it makes sense for them," he said.

Disha Microfinance, which has a small finance bank licence, is also looking at tie-ups with WLA players. "We are yet to chalk out the final plan but I think we will have some of our own ATMs and for some we will tie up with other players," said Rajeev Yadav, director, Disha Group.

K Srinivas, managing director and CEO, BTI Payment, added with the payments banks and small finance banks coming in, the opportunity would be huge. "Since this will mean issuance of more cards and more transactions, it will be a good opportunity for ATM operators. Also, since the concept of shared infrastructure can work efficiently in this, the niche banks will look at tie-ups," he said.