Despite digital transactions, ATM demand remains strong: OKI India CEO

Japanese firm OKI sets up a new manufacturing plant in India, banking on strong demand for cash machines and recyclers even as digital transactions soar

Oki Electric Industry Co, or OKI, has been selling automated teller machines (ATMs) in India for a decade. It is setting up a manufacturing unit where production will roll out at around 500 units per month, with plans to increase it to 1,000. The move comes even as banks are sprucing up their ATM channel (the installed base is around 265,000) even though digital transactions are soaring. Rupinder Sandhu Anand, chief executive officer of OKI India, speaks to Raghu Mohan in an email interview about the industry’s dynamics. Edited excerpts: 

You are setting up a manufacturing facility out here at a time when the narrative is that digital transactions will swamp those in cash. 

While digital payments are growing, the ground reality — both in India and globally — is cash remains deeply relevant. In India, although digital adoption has been dramatic, cash in circulation has more than doubled to ₹35 trillion since demonetisation. Cash withdrawals in value terms continue to grow year-on-year through ATMs, micro-ATMs and bank branches. Digital adoption and cash usage are rising in parallel, serving different customer segments and transaction needs.

 Our decision to set up manufacturing here is based on long-term demand visibility and strong confidence in the Indian market. Banks are expanding and modernising their ATMs and cash recycling machines (CRMs — in which you deposit and withdraw cash, particularly in the semi-urban and rural regions).

 

Was it flawed to position cash versus digital transactions as a binary in the first place? 

Absolutely, it was indeed a flawed narrative to position cash and digital payments as binaries. They are not competitors — they are complementary parts of the same payments ecosystem. Countries that have some of the highest digital adoption, including Japan and many in Europe, continue to have strong cash usage as well. Cash remains a critical hedge against the inherent vulnerabilities of digital systems, whether due to cyberattacks, technical failures or geopolitical risks. But what actually happens is that consumers choose the most convenient option — digital for speed and remote transactions, and cash for everyday budgeted spending and reliability. Framing it as ‘cash versus digital’ oversimplifies the needs of a diverse population.

 

Your reading of the ATM market out here. As in, the demand for both fresh installations and replacements of machines. 

What we are seeing today is a dual engine of growth: Fresh deployments in underserved regions, and a strong replacement cycle in the urban and semi-urban markets. On the fresh-deployment side, banks are still expanding their reach, particularly in Tier-II and Tier-III locations where ATMs and CRMs remain essential for daily banking needs. Cash continues to be the primary mode of transaction in these markets, and banks view self-service infrastructure as critical to improving customer access. India has a very large installed base of ATMs, many of which are ageing or using older generation technology. This is driving a consistent replacement demand for more advanced, secure, and efficient ATM and CRM models. Banks are also upgrading to machines with better security features and cash-recycling capabilities. Our reading is the market is stable, long-term, and investment-worthy. It’s not a declining market; rather, it’s evolving.

 

Do you see a marked shift in preference for CRMs over legacy ATMs? 

Yes, there’s a clear and sustained shift toward CRMs. Banks today are far more focused on efficiency, automation, and reducing the cost of cash operations. CRMs help them achieve all of these by automating deposits and withdrawals in the same device, reducing cash handling at branches, lowering cash-in-transit expenses, and improving uptime. Legacy ATM machines are still in use but most banks are prioritising recyclers for both fresh deployments and replacements. The shift is driven not just by technology but by economics — CRMs deliver better operational efficiency and a stronger return on investment.

 

The ATM interchange has been hiked by ₹2 to ₹19 but has the issue of the channel’s viability been sufficiently addressed?

The interchange issue has seen progress but it is fair to say that it is not fully resolved from a long-term channel viability perspective. The upward revision in interchange has provided some relief to deployers, especially in an environment of rising operating costs — security, cash-handling, manpower, rentals, and technology upgrades. However, the economics of ATM operations continue to be challenging for many. CRMs have helped improve viability by reducing some replenishment costs, but the overall model still requires periodic review.