ATM outsourcing firm Electronic Payment and Services Pvt Ltd (EPS) has completed its second round of equity funding worth $6 million (Rs 38 crore) from its existing investor Aavishkaar Venture Management. The investment follows fundraising to the tune of Rs 20 crore from two funds managed by Aavishkaar last year.
EPS aims to deploy 5,000 ATMs in Maharashtra with a deployment rate of about 300-400 ATMs per month by end of March 2014.
Indian banks are expanding their presence across the country by deploying more multi-utility ATMs to drive financial inclusion strategy and the payment space is reaping benefits through the increased business.
According to EPS, Indian ATM industry is on an upswing and in the long term has an opportunity of over a million ATM deployments at least on par with developing economies like Brazil.
Inadequacy of servicing the entire demand through traditional banking methods and pressure on banks to reduce costs have led to growth of ATM industry in India, which is expected to grow to more than 300 per cent in the next three years, said the company.
The number of ATMs in the country could grow from 120,000 to 300,000 in a few years with the addition of white label ATMs in the market.
“The government of India’s drive and initiative of Direct Benefit Transfer (DBT) has resulted in banks strengthening their infrastructure to rollout ATMs so that the beneficiary can avail cash from ATMs in rural areas. Towards the same, public sector banks have identified 121 districts for rollout of ATMs and vendors have been instructed to deploy ATMs in these rural districts under DBT schemes,” said Vidya Mani, co-promoter of EPS, referring to one of the drivers of the business.
Another driver is the opening of the market to while label ATMs which allow firms other than banks to set up ATMs. A number of payment solution firms have applied for the RBI’s approval to enter the business segment.
RBI has already given approvals to Tata Communications Payments Solutions, Prizm Payments, Srei Infra and AGS Transact Technologies for setting up white label machines. The firms have also attracted private investment interest and among the more notable deals in the recent past, Actis invested in Mumbai-based AGS Transact.
(Edited by Joby Puthuparampil Johnson)