Axis Bank has entered into separate deals with two third-party service providers for the setting up and management of more than 5,000 ATMs over the next 18 months, the Mumbai-based bank says.
The bank has also selected a vendor to manage its 4,923 ATMs, Axis said in a statement. The bank in January signaled its plans to outsource its ATM operations (see story).
Chennai-based Prizm Payment Services Pvt. Ltd. will set up 3,500 ATMs for Axis, while Mumbai-based AGS Infotech Pvt. Ltd. will set up 1,500 ATMs, an official from the bank confirms to PaymentsSource.
The spokesperson declined to disclose financial details of the deal, saying only that the bank will pay the service providers a per-transaction fee. “The fee for cash withdrawals will be between 13 rupees (28 U.S. cents or 23 euro cents) to 15 rupees, while balance inquiries will cost 3 to 5 rupees each,” he says.
Banks in India have been looking to outsource their ATM-management since the Reserve Bank of India asked them to stop charging customers for cash withdrawals.
The trend gained momentum last year when banks, following a directive from the central bank, stopped charging even third-party customers for cash withdrawals (see story). That ruling was later overturned and banks were permitted to charge transaction fees to customers who had used their quota of five free third-party transactions per month.
But banks “have seen the writing on the wall that sooner or later, ATMs would become free again,” Mrinalini Manral, an analyst with the Mumbai-based research firm Dassler Business Intelligence, tells PaymentsSource. She notes that despite the respite banks received from the ruling’s overturn, “it’s only a matter of time that public consensus is built towards free withdrawals across bank ATMs.”
State Bank of India Ltd. last year inked similar ATM-outsourcing deals with multiple vendors, and Yes Bank Ltd. inked such a deal with First data Corp. (see story).