NEWS & ADVICE : CREDIT CARDS
ATM management is now a big business
By Ankit Sharma
Jun 14, 2012
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Companies managing automated teller machines (ATM) for banks are raking in big money from investors all across the globe; the business is so profitable that few of these companies have valuations higher than few of the small nationalized banks.

One such company, Financial Software and Systems (FSS) is expecting to earn Rs. 650 crore this fiscal against Rs. 240 crore two years before. The company has also attracted an investment of $ 350 mn (Rs. 1,900 crore). AGS Transact, Prizm Payments, and Electronic Payment and Services are few other companies in the field.

The demand for such companies has been increasing since the RBI directed removal of charges on accession fees at other bank's ATM. The access fee is removed for the customers, but the banks have to pay a fee for each transaction, so this has now become revenue generation for banks.

Banks have since then been opening ATMs at a very rapid pace; ATM count in March 2010 was 60,000 and currently it is only a few hundred short of one lakh mark. This growth has seen foreign investors like Blackstone Group, General Atlantic Partners to venture into the $ 2.5 bn industry.

The Finance Ministry is even considering demarcating the market into circles and allot PSU banks' ATMs to one company per circle. This might bring these companies to set up 62,000 ATM as planned by PSUs for the next two years.


 


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