How do you make a farmer in Chandrapada village in rural Thane understand what a white-label automated teller machine (ATM) is and make him use it?
Tata Communications Payment Solutions (TCPSL), the wholly owned subsidiary of Tata Communications, is faced with such challenges, being the sole operator in the country of such ATMs, which do not belong to any particular bank but are operated by private players. Tata launched the first white-label ATM four months back in Maharashtra.
Ever since, it has sought to overcome many hurdles in rural areas. It is now using some unconventional methods like taking help of shopkeepers or even local residents to spread awareness.
“In some rural areas, we are facing such issues of market development. So, we are getting in touch with the shopkeepers near the ATMs who then evangalise the machine. People looking for an ATM in a busy marketplace or a busstand often walk up to a shop asking for a bank ATM. The shopkeeper then points to the white-label ATMs and explains that money can be withdrawn from the machines,” said Sanjeev Patel, CEO of TCPSL.
Since June, TCPSL has set up about 400 ATMs in eight states. On Tuesday, it inaugurated 16 in West Bengal, including eight in Kolkata.
In April, the Reserve Bank of India (RBI) had given permission to 13 non-banks like Muthoot Finance, Srei Infrastructure Finance, Vakrangee Software, Prizm Payments and AGS Transact to set up white-label ATMs.
But none other than TCPSL has launched services till now. Unwittingly, the firm finds itself shouldering the responsibility of creating awareness about this new kind of ATMs.
“There’s no point going in for advertising in mass media telling people about these ATMs as no one would go hunting for them. The awareness has to be created only in the vicinity where those machines are installed,” said Patel.
A key factor deciding the viability of the business model is the rental that TCPSL has to pay for the space.
And to keep it at reasonable levels, the company is tying up with other Tata group companies like Tata Motors, Croma Retail and even Tata Steel to get access to spaces like an auto showroom, a store or even outside a factory accessible to the public.
“We need to have our rental low, at least below what a bank would be paying for its own ATM nearby,” said Patel.
Depending upon the rental, every white-label ATM needs to get 75-125 transactions a day to make the investment viable, he said.
Under the revenue-sharing model with banks, TCPSL will receive Rs 15 for every cash transaction and Rs 5 for a balance enquiry.
Beyond that, additional revenue streams need to be developed. The site of the ATM might be used to provide other services like ticketing, bill payment or, maybe, even photocopying service to create footfalls.
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