ATMs & CRMs – Unveiling Their Benefits in India’s Evolving Payment Landscape

The Indian economy has witnessed a remarkable blend of cash and digital payments. While digital transactions have gained traction, cash remains a vital mode of payment, offering reliability and convenience.

Automated Teller Machines (ATMs) have emerged as pioneering fintech marvels, enhancing accessibility to cash in both rural and urban areas. ATMs played a crucial role in promoting financial inclusion before the advent of digital payments and continue to play an important role today. 

The Rise of Digital Payments and Coexistence with Cash:

Digital payments in India have experienced a staggering growth of about 56% in transactional volume in FY22-23, primarily driven by the Unified Payments Interface (UPI). At the same time, as of March 3, 2023, the currency in circulation stood at 33.45 lakh crore, according to data released by the Reserve Bank of India (RBI). This suggests that as the payment landscape transforms, cash and digital payments will coexist. Amid this evolving scenario, Cash Recycling Machines (CRMs) are gaining popularity as an innovative solution.

Differentiating ATMs and CRMs:

  1. ATMs: Automated Teller Machines serve as self-service terminals enabling customers to conduct various banking transactions such as cash withdrawals, fund transfers, balance inquiries, and bill payments. ATMs have been instrumental in driving financial inclusion by providing access to banking services and cash for many Indians.

  2. CRMs: Cash Recycling Machines, on the other hand, not only dispense cash but also accept deposits. These machines efficiently sort, count, and store banknotes, allowing for their reuse when needed. By reducing manual cash handling, CRMs enhance efficiency, security, and cost-effectiveness for banks. Furthermore, the deployment of CRMs reduces the need for frequent cash replenishment trips by cash management agencies to ATMs.

The Growing Popularity of CRMs: 

According to a media report released in February 2023, Cash Recyclers account for 20% of the total 250,000 installed ATMs in India. The Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) allowing interoperability on CRMs will further bolster their growth. CRMs are predominantly deployed at bank branches, shifting the deposit process from tellers to self-service terminals, thus reducing human intervention and enhancing overall operational efficiency. Consequently, the cost of a cash transaction at a bank branch can be significantly reduced with the implementation of CRMs.

Benefits for Small Business Owners/Merchants: 

CRMs offer noteworthy advantages to small business owners and merchants who primarily deal in cash. They can conveniently deposit their daily, weekly, or monthly collections using CRMs, eliminating the need to visit the bank, and facilitating real-time deposits. Additionally, merchants can have access to all these facilities almost 24×7.  This streamlined process enhances the overall banking experience for merchants, fostering operational efficiency across the channel.

AGS Transact Technologies’ Expertise in CRMs:

As one of the largest integrated omni-channel payment solutions providers in India, AGS Transact Technologies Ltd (AGSTTL) boasts a managed base of 5,178 CRMs as of March 31, 2023. AGSTTL assists banks in deploying these versatile terminals at their branches or off-site locations. Furthermore, as the second-largest company in India in terms of revenue from ATM managed services under the outsourcing model, AGSTTL efficiently manages these CRMs on behalf of banks.

In summary, while both ATMs and CRMs facilitate various banking transactions, CRMs offer the additional functionality of cash recycling, making them more advanced and sophisticated machines. Government initiatives such as the establishment of Digital Banking Units or DBUs are likely to encourage banks to deploy more CRMs compared to ATMs, aiming for economies of scale in the evolving payment landscape of India.

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