A Beginners Guide to White Label ATM Franchise

What is a white-label atm franchise?

A white-label atm franchise is a non-bankable entity where the machines are established, operated, and owned. The various non-bank entities were established in India under the Companies Act 1956.

WLA (White Label ATMs) companies allow users to function in the banking network and allow customers of any particular bank to withdraw funds. In addition, they charge fees from the card issuing bank to provide the required banking facilities to the users.

The ATMs set up under this particular business model are known as the white label atm operators. RBI has authorised the WLAs by the various non-bank entities under the Payment and Settlement System Act, 2007 so that the network can increase in India, especially in areas such as semi-urban and rural.

What are the facilities associated with the White Label ATM?

There are many facilities associated with white-label ATMs. functioning networks such as Tata Indicash ATM are also one of the atm franchises that are also working as WLAs. So the facilities that they are offering to the customers are vast. Now let us look at the functions they are offering in detail.

• Value-added services such as utility bill payments, mobile recharge facilities, etc.

• They work 24X7 and on holidays such as festivals and guest holidays.
• Every month five transactions are free.
• Any customers having an account in any particular bank are free to use this facility at their convenience.

How does the White Label ATM industry was initiated in the country?

Till the year 2012, only certain specific banks were allowed to set up ATMs in the country. Then RBI regulated new rules in March 2012 after a survey which showed that the number of ATMs employed in India is 95,686 with most of them situated in urban and metro regions.

So for the development of the country and an objective to expand the network in rural and small urban regions, RBI decided to permit non-bank entities to set up, operate and own ATMs in India. The main objective to start the ATM franchise in India was to spread positive word of mouth about the economical facilities and increase the bank and ATM penetration as the growth was not insignificant.

There are various entities that RBI has granted certifications. The list is as follows:

• Tata Communications Payment Solutions Limited
• AGS Transact Technologies Limited
• RiddhiSiddhi Bullions Limited
• SREI Infrastructure Finance Limited
• Muthoot Finance Limited
• India1 Payements Limited
• Vakangree Limited
• Hitachi Payment Services Private Limited

How many White ATMs are in India?

In a country like India operating a white-label ATM can be challenging. RBI gave certifications to certain specific companies as mentioned above to work as a WLA. Now let us look at the exact number of non-bank entities that are working in the country.

WLA Operators Licesne Approval Number of ATMs

• Hitachi Payement services 25th Nov 2013 5,388
• Vankragee 23rd Jan 2014 5,414
• Tata Communications Payment Solutions 3rd May 2013 6,189
• India1 Payments Limited 12th Feb 2014 8,022

What are the benefits of White Label ATMs?

There are many advantages and benefits of a WLA. Some of the most significant benefits are mentioned below. They are as follows:

• White Label ATMs can provide customers with mobile recharge, value-added services, energy bill payments, etc for the convenience of the customers.
• It can allow ATM cards to be issued by any specific bank that can work as a White Label ATM.
• Through the White Label ATMs, the financial independency of low-income groups, in semi-urban and rural areas is possible.
• It can lower operational costs so the bank can get benefitted from it.
• ATMs are available 24 hours a day, seven days and it includes holidays.
• Customers are most benefitted as it eliminates the need to visit the specified bank branches on a daily or regular basis. So it is a more convenient option for the users as compared to others.

Are there limitations associated with White Label ATMs?

Every operation has its own advantages, benefits, disadvantages, and limitations. The most common limitations are as follows:

• If there is a bank ATM in the region where a WLA is situated it may be not able to generate profits.
• The financial stability of the WLA is under the scanner as it offers low interchange charges and high operational expenses.
• Most of the customers are discouraged by the cost issues as every time they use the services of WLA they are charged a high amount.
• In case of unsuccessful transactions, it can be the reason for concern in certain specific cases.

Conclusion

In recent times the popularity of White Lable ATMs is rising. The above detailed information about this setup is given. So if you want to gain the required information then read now!