Concept Paper – What is good for India- Cash Withdrawal through ATMs or POS Terminals?

The following is the ATM usage pattern in India


It may be noted that the average ticket size is Rs3,200/-. Averages are not a good statistics tool to measure data, as the average figure might be skewed. However in the absence additional information on ATM transactions in the public domain, I have relied on the RBI published data.

Cost of running an ATM :

Two types of costs are associated with ATMs.

01)Capital Cost – ATM Machine Cost, ATM premises Cost

02)Running Cost – ATM premises rent, ATM Security guards salary, Electricity, Housekeeping

The only benefit of ATMs is the option for Pin Change and Mini Statement.  There are other options too viz

01)Phone recharge

02)Tax payment

03)IMPS transactions

04)Cheque book request

However, with mBanking picking up, the above set of transactions can be migrated to mBanking.

Cost Comparison of ATM vs POS Terminal

Sr No Type of Cost ATM POS Remarks
01 Machine Acquisition Cost Yes Yes POS is 90% cheaper as compared to ATM
02 Premises Cost Yes No POS terminals are part of a commercial establishment, no dedicated premises are required
03 Security Guard Yes No POS terminals are part of a commercial establishment, no dedicated premises are  required
04 Electricity Yes No Minimal electricity cost
05 Housekeeping Yes No POS terminals are part of a commercial establishment, no dedicated premises are  required
06 Cash Replenishment Yes No Physical cash is available at the commercial establishment, as and when cash sales are made


07 Encourage Less Cash transactions No Yes Customers can pay for their purchases through POS terminals instead of cash
08 Reduce carbon emission No Yes  
09 Reconciliation issues Yes No Reconciliation issues at POS terminals will be minimum as to complete a POS cash withdrawal transaction, a human has to hand over the cash


Long back in 2009, Reserve Bank of India issued guidelines on Cash Withdrawal at Point of Sale Terminal

Many Banks have commenced this facility, however due to various reasons the volumes did not pick up.

A concerted effort by all the Banks under the umbrella of Indian Banks Association would go a long way in migrating transactions from ATMs to POS Terminals.

Some pointers:

a)    Standardized Display board at establishments offering Cash Withdrawal facility through POS Terminals.

b)   Ensuring 100% uptime

c)    Double/Triple reward points for cash withdrawals through POS terminals.

d)   Short Educational videos


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