The bank is responsible for providing cash and its brand name on the ATM along with the upgrading of the
ATMs. The service provider is paid per transaction or through a monthly fee within the brown label or
completely outsourced model (transactions done by any debit card customers on ATMs). The major services for
which the bank pays the service providers are cash management, network monitoring, security services and
housekeeping. The average number of transactions at an average ATM in a single day for financial year 2021
was 87 transactions, including financial and non-financial transactions.

The following table sets forth a profitability analysis of offsite brown label ATMs in India:

 

 

 

 

 

 

 

Parameter Value in 2, FY2021
Cost per transaction BT.
Revenue per transaction 11.0
Profit per transaction 3.3
Number of transactions for break-even per day 70
Coverage of investment after years 3.8

 

 

 

Source: India ATM Market Outlook to 2026, Ken Research, August 2021.
ATMs through Managed Services

In the managed services model, a bank leases the site and owns the required equipment. However, the banks:
contract the servicing of the ATM to a third-party service provider or vendor. After outsourcing services, the
bank is only involved in providing cash for the ATM or providing cash settlements. The bank pays the vendor
for its services either through a fixed fee per month, or on a pay-per-use or per-transaction fee.

Public sector undertaking ATMs under managed services generally follow the fixed fee model wherein the bank
pays a fixed amount for every service used by the bank.

India’s ATM Managed Services Market Size by Revenues

The revenue of India’s ATM managed services market declined by approximately 7% f from 121,984.7 during
financial year 2020 to 7113,408.4 million during financial year 2021 due to restrictions and lockdowns in India
on account of the COVID-19 pandemic. People in India shifted to digital payment methods which led to the
decline of cash withdrawals and usage of ATMs in the country, which in turn led banks to halt plans for setting
up ATMs.

The following chart sets forth the size of India’s ATM managed services market based on revenue and growth
rate during financial years 2016 to 2021:

 
 
 
   

1,40,000.0 20.0%
1,14,640.0 1,21,984.7
1,20,000.0 113,408.41 15.0%
99,701.4
1,00,000.0 } 91,325.8  91,603.3 100%
80,000.0 ge
5 50%
™ 60,000.0 2
é
00% =
40,000.0 6
20,000.0 =Bi0%.
oo + + -10.0%

 

FY'2016 FY'2017 FY'2018 FY'2019 FY'2020 FY'2021
mu 2 Million == Growth %

Notes: FY is a financial year ending March 31. India's ATM managed services include ATM monitoring, setup and maintenance of a 24-
hour help desk to ensure availability of ATMs, automatic generation of trouble tickets, event and incident management, provision of first-
level maintenance, coordinating with OEMs for second-level maintenance, including preventative maintenance and on-call break-and-fix
services, cash monitoring, forecast and replenishment, regular reporting of ATM uptime and site maintenance. The chart also includes
revenues generated from ATM supply. AMC charges have not been considered as a part of revenues from ATM supply. The expenses
incurred by banks in case of ATMs which they manage on their own have not been taken into consideration, while the sale of ATMs made to
direct banks has been considered. The market includes cash management services as well, which includes ATM replenishment, cash-in-
transit, retail cash management and other cash management services. The cost is considered at the contract level and subcontracting of
services is considered as well.

Source: India ATM Market Outlook to 2026, Ken Research, August 2021.

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