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Micro ATMs
Context:
The micro-ATM sector has remained resilient despite the rise in digital payments and stagnant pricing.
More on News:
- A largely overlooked directive issued by the National Payments Corporation of India in March 2020 permits cash withdrawals over UPI at merchant locations.
- Increasing the speed and local availability of cash in circulation (CiC) can be achieved by reducing logistics costs.
- This can be done by eliminating the need to send cash to banks for sorting and bundling, as is required for ATMs, and calls attention to micro-ATM.
Micro-ATM
- They are similar to point-of-sale (PoS) terminals operated by bank business correspondents (BCs), and function as mini handheld ATMs.
- It is a compact version of an ATM, connected to the banking network via GPRS and includes a card swipe facility.
- It includes a card reader for cash withdrawals and balance inquiries using any domestic bank debit card.
- This initiative aims to bridge the cash availability gap in the ecosystem.
- Their primary advantage is addressing low ATM penetration while also speeding up the recycling of cash in circulation (CiC).
- They enable account holders to withdraw and deposit cash using Aadhaar and biometric authentication without visiting bank branches or ATMs.
- Authorization in four ways:
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- PoS Terminals: Different transaction identifiers on PoS terminals.
- AePS-Enabled PoS: Aadhaar-enabled payment system terminals with biometric authentication.
- Micro-ATMs: Direct micro-ATM transactions.
- UPI QR: Transactions via UPI QR codes.
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- Transaction Volumes:
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- RBI Data (May 2024): Approximately ₹22,804 crore withdrawn via 1.562 million micro-ATMs across 87.979 million transactions.
- Traditional ATMs saw withdrawals of approximately ₹2,60,240 crore across 516.641 million transactions. Nearly eleven times higher than micro-ATM withdrawals.
- Only off-us cash withdrawals are captured in RBI data. For example, a Direct Benefit Transfer (DBT) beneficiary with an SBI account withdrawing from a BC of another bank.
- On-us transactions, where the withdrawal is made from the same bank’s BC, are not captured.
