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A senior executive with EKO India Financial Services, also looking to enter the ATM business, said Seven Bank had spoken to his firm and many other prospective players in the white label ATMs space. Delhi-based EKO provides payment, cash collection and disbursal services with support of low-cost infrastructure.
White label ATMs are those machines which are set up, owned and operated by non-banking companies. The Reserve Bank of India (RBI) has thrown open the ATM segment for non-banking entities to increase penetration of alternative payment channels in semi-urban and rural areas. Meanwhile, RBI India has given in-principle nod to Tata Communications Payments Solutions, Sequoia Capital-backed Prizm Payments, Srei Infra and AGS Transact Technologies for ATM roll-out. All of them are currently engaged in managing ATMs of different banks.
Many more companies are in the race. Mahindra and Mahindra and L&T Finance are believed to have put hat in the ring. Spokespersons of both companies declined to comment. Officials at Tata Communications Payments refused to comment on the development as the matter is sensitive.
Amitabh Chaturevedi, executive vice-chairman, Purple India Holdings, a corporate advisory firm, said those who had deep pockets and tie-up with groups with space at vantage positions will have an edge.
Tata Communications Payments has already won a contract for 1,400 ATMs for all public sector banks across Andhra Pradesh, Tamil Nadu, Puducherry, West Bengal and Andaman and Nicobar Islands.
Mumbai-based ASG Transact raised $40 million (around Rs 220 crore today) from private equity firm Actis in 2012. It manages ATMs for private lenders like Axis Bank, Dhanlaxmi Bank and HDFC Bank.
Stanley Johnson, president�"managed services at AGS Transact, said the company would firm up sponsor bank (for settlement and cash management) and also partner with retail chains (for ATM sites). It plans to set up 9,000 ATMs in three years. It can install 100 ATMs in Tier-I and II centres against 300 ATMs installed in tier II to tier VI centres, according to RBI norms.
Prizm Payments officials also preferred to remain silent on the development. Prizm currently has over 10,000 ATMs under management.
The expansion of the ATM network will spawn growth of cash management and security services. N S G Rao, secretary general, Cash Logistics Association, said companies that provide support services like cash management and network security to ATM deployers would ramp up operations.
They will need capital infusion to fund growth. Private equity could be one source for capital injection.
