What is White Label ATM?

About White Label ATMs

  • ATMs created, owned, and operated by non-bank entities are known as white label ATMs.
  • They are licensed underneath the Payment and
  • Settlement Systems Act, 2007, by the RBI.
  • Cash in ATMs is provided by the sponsored bank whereas ATMs don't have any branding of the Bank.
  • Their role is confined to facultative transactions of all bank customers by establishing technical property with the present licensed, shared ATM Network Operators or Card Payment Network Operators.
  • The operators are allowed to receive a fee from the banks for the utilization of ATM resources by the bank’s customers and aren't allowable to charge bank customers directly.
  • RBI was given the first approval to open WLAs to  Tata Communications Payment Solutions Limited (Indicash).
  • RBI is directly concerned as a result of these white label corporations ought to severally get license/permission from run to run business.

Why do we want White label ATMs?

  • ATMs provide convenience to the client (Because he doesn’t ought to visit the Bank branch each time). We need ATMS should be working all day even on holidays,i.e 24/7.
  • Convenience to the bank, as a result of they don’t ought to keep massive staff/office (compared to a system while not ATMs). It reduces the price of branch-operation
  • Besides dispensing money, WLAs can also supply several services and facilities to users. Such services embody account data, money deposit, bill payment, mini statement, PIN change, and inserting requests for chequebooks
  • Typically, white label ATMs, or WLAs, are the ATMs created and operated by a non-bank. As a client, one will use these machines even as an everyday ATM. WLAs supply debit card services like money withdrawal and inquiry.

What is the meaning of White Label ATMs? 

  • The meaning of White Label ATM is defined in easy terms, White Label ATM means that the machines are established, owned, and operated by non-bank entities. Non-bank entities incorporated in India beneath the Companies Act 1956 are allowed to control WLAs. 
  • WLA corporations plug into the banking network and permit customers of any bank to withdraw funds and additionally provide different services like bill payment and money deposit services. In return, WLA operators charge fees to the card-issuing bank for providing the ability to bank customers.

What is a White label ATM?

  • The ATMs that are started, owned, and operated by non-bank entities are called “White Label ATMs” (WLAs). 
  • The ATMs got wind of beneath this business model to carry the name of the White label ATM operators, and customers, regardless of the bank they maintain accounts with, are ready to use these ATMs for their banking transactions.
  • The RBI has approved the operations of WLAs by non-bank entities beneath the Payment & Settlement Systems Act, 2007, to extend the ATM network in India, particularly in rural and semi-urban areas. 

Understand  the Operations of White Label ATM works 

  • From a user's purpose of reading, the operations of a WLA are kind of like the other ATM. However, the backend could also be quite advanced. A white label ATM operator must act with 3 different intermediaries within the entire dealing method.
  • A typical white label ATM operator operates through a loaning bank, a sponsor bank that manages settlements, and an ATM network supplier like NPCI. WLA operators operate beneath a B2B business model by going in partnerships with banks. However, the revenue and profitableness are heavily obsessed with the number of transactions at WLAs.
  • Hence, a WLA operator additionally has to build connections with the end customers, like in an exceedingly B2B business model. 
  • Connecting with potential customers, and building awareness and trust within the client regarding the security and convenience of WLAs is as necessary as building relationships with sponsor banks. Sturdy specializes in investments directed at building customer trust towards the whole helping WLA operators to draw in clients, sound at ATMs, and thereby revenues.

Facilities with White Label ATM 

  •  Any client happiness to any bank can use it. 
  • Five transactions are free, monthly. 
  • Open 24/7 and on holidays 
  • Value supplemental services like mobile recharge, utility bill payments, etc. 
  • As one will see, a white label ATM works a bit like a daily bank ATM. It offers additional facilities and services like mobile recharges, utility bill payments, etc to retail users. 

History of White Label ATM business in India

WhiteLabel ATMs in India

Until 2012, solely banks were allowable to line up ATMs in India. in keeping with RBI, as of March 2012, the number of ATMs deployed within the country was 96,686, with nearly seventieth of the ATMs deployed in urban and rural areas. Within an objective to expand the ATM network in unbanked and underbanked regions of the country, in the Gregorian calendar month of 2012, run determined to allow non-bank entities to set up, own, and operate ATMs in India. The first objective of allowing non-banks to control white label ATMs (WLAs) was to reinforce the unfolding of ATMs in semi-urban and rural areas wherever bank-owned ATM penetration wasn't growing. 

Growth of White Label ATMs in our Country

  • The number of ATMs deployed by WLAOs reached over twenty-five thousand in March 2021. This reflects a powerful CAGR of twenty-first between March 2015 and March 2021.
  • As of July  2021, solely four WLA ATM operators stay within the trade – specifically, India1 Payments  Tata Communications Payment Solutions, Hitachi Payment Services, and Vakrangee.
  • The ATMs that are established, owned, and operated by non-bank entities are referred to as “White Label ATMs” (WLAs). Non-bank entities that are incorporated in India, beneath the businesses Act 1956, are allowed to run WLAs.

Regulatory Tailwinds for WLA ATM Operators

  • In March 2019, RBI relieved business tips for WLAs, permitting them to directly supply money from RBI to cut back the white label ATM operators’ dependency on bank withdrawals. This has resulted in higher convenience of money all told denominations and a discount in transportation and operational prices for white label ATM operators.  

Functions of White-label ATM

  • To reinforce the viability of White Label ATMs (WLAs), the run has allowed White Label ATM Operators (WLAos) to shop for wholesale money from the run and currency chests. 

  • This will give practicality to WLATMs, as they're cash-starved as a result of the banks' accustomed offering preference to the ATMs deployed by them. 

  • Until now money Management at the WLAs was the responsibility of the Sponsor Bank. 

  • Permitting WLAO to supply money directly from RBI, can encourage additional WLATM to be opened across the country, thereby resulting in the deepening of monetary inclusion 

  • In September 2015, Government allowable Foreign Direct Investment (FDI), up to 100%, beneath the automated route. 

  • Non-bank entities are allowable to line up WLAs in India when getting authorization from run beneath the Payment and Settlement Systems (PSS) Act 2007. 
  • Such non-bank entities ought to have a minimum value of Rs 100 large integer.

Conclusion

White label ATM Companies in India

Tata Communications Payment Solutions restricted (TCPSL) was the primary company approved by the banking concern of India (RBI) to open White Label ATMs within the country. It got launched under the name 'India cash'. 
 
White Label ATMs are like traditional ATMs. However, a money deposit or money acceptance facility isn't allowable at the WLA. The distinction is that this ATM doesn't have any disapproval from the Bank. These machines are typically deployed by NBFC (Non-Banking Financial Institutions).
 
The basic plan regarding White Label ATMs is to extend the geographical unfold of ATMs to reinforce money inclusion.

FAQS

How many varieties of ATMs are there?

  1. White Label ATM – once ATMs are in hand and operated by non-bank entities however they're not doing ‘outsourcing contracts’ from a specific bank.
  2. Brown Label ATM – once banks outsourced the ATM operations to a 3rd party.
  3. Green Label ATM – ATM is provided for Agricultural dealings.
  4. Orange Label ATM – it is used for Share Transactions.
  5. Yellow Label ATM – Created with the aim of E-commerce.
  6. PINK label ATM – Such ATMs are monitored by guards who make sure that solely ladies access these ATMs. The only real purpose of such ATMs is to mitigate the matter of girls standing in long queues of ATMs.
  7. Biometric ATM – ATMs that use safety features like fingerprint scanners and eye scanners of the client to access the bank details