Cash is still king in rural India, UPI favourite in metros


Kolkata: While the surge in digital banking has made the withdrawal of money from ATMs a passe now, ATM makers like Diebold Nixdorf or ATM operators like Euronet Worldwide are thinking differently.

They are, in fact, expanding capacities in India, anticipating sustained demand for cash withdrawals in the rural belts.

To be sure, banks – both private and government-owned – have slowed down ATM installations in new urban locations.

ATMs are still very relevant for cash customers in India, especially in the tier-2 to tier-6 towns, said Himanshu Pujara, Euronet’s managing director for Asia Pacific region.

“Our strategy is to continue deploying and continue investing into the ATM business. The key thing is that we need to be very, very focused and diligent as far as our site selection strategy is concerned,” he said.

Banks and operators like Euronet believe that there is no point in deploying ATMs in the top 10 metros as the comfort of UPI transactions has overshadowed cash withdrawal.

Top bankers say that cash withdrawal from ATMs slowed down in major cities, as payments through UPI (united payments interface) have clearly taken over. As far as the top 10 cities are concerned, one could find QR codes everywhere supporting the digital mode of payment. UPI processed a record 7.3 billion transactions valuing over Rs 12 lakh crore in October.

“I think the strategy is to be more in terms of going into the semi urban and the rural areas where there is still a customer that relies on cash,” Pujara said.

Diebold Nixdorf has just announced its new 27,000 sq. ft. manufacturing facility in Bengaluru to make ATMs and cash recycling machines.

The unit with a capacity of manufacturing more than 18,000 machines per year is ready to begin full-swing production in December. The plant has been set up with its contract manufacturing partner in India, NASH Industries.


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