What is the purpose for introduction of White Label ATMs in India
In India only Banks are allowed to set up ATMs. Although between 2008 - 2011, there has been 30% growth in number of ATMs and by the beginning of 2012, we have about 87,000 ATMs in India, yet the penetration of ATMs in Tier III and Tier IV cities has been low and downtime of such ATMs has been high. Thus, RBI is feeling that there is a need to expand ATM network, which can be done by only with the help of private operators.
Who will benefit from White Label ATMs :
The white label automated teller machines are likely to benefit customers as well as banks. With the expansion of ATM network, customers will be able to withdraw funds at more locations which will be convenient and located near to their home or place of work. Banks too support introduction of white label ATMs as such machines are likely to reduce pre-transaction cost for them and will be free from the problems relating to maintaining and running such a payment channel
What Problems are Likely to be Faced by Bankers and Customers :
Bankers are already sounding caution about the pitfalls of white label ATMs. The first and foremost concern for customers will be the inconvenience they may feel in case of failed transactions on WLAs. In such cases the dispute resolution mechanism will involve three entities — the WLA operator, the sponsor bank of the operator, and the customer's bank. The WLA operators being non bank entities and running purely on profit basis may take longer time or avoid payments on account of failed transactions. The second concern for customers will be the high cost they are likely to pay for use of such ATMs.
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