Understanding Micro
ATM and how it works
in rural India

Understanding Micro ATM and how it works in rural India

Ever since demonetization happened, Micro ATMs have been the buzz word. Micro ATM looks like a card swiping machine but is able to offer banking without the bank to the last mile. Banks can remotely connect to their core banking system through this machine. Micro ATMs work like handheld point of sale (PoS) terminals which can be specifically used to disburse cash in remote locations or rural areas of the country. This is a doorstep mobile banking arrangement cum-mobile ATM device.

The micro ATM machine comes with a fingerprint scanner attached to it and has the ability to scan Aadhaar details. This helps banks and payment solution companies to connect with the large unbanked sector effectively.

These machines are typically used by business correspondents (agents who represent banks in rural areas) of banks to connect customers who are far away from branches. The agent (a businessman or a shopkeeper) acts as the cash disperser for the ATM. He collects deposits and feeds in data and also pays out from his pocket and debits the account. There are no service charges for using Micro ATMs.

Micro ATMs are expected to be viable where ATMs are not. ATMs need at least 80-100 transactions a day to be viable as they cost several lakh and have monthly operating expenses such as account rental, telecom charges, AMC costs, electricity expenses and security guard. A micro ATM costs less than Rs 20,000. Since connectivity is through GSM, the agent can carry it and travel village to village at set times.

How does a Micro ATM work?
Bank will assign a correspondent who will sign up customers in remote areas after verifying their identity (fingerprint can be used as an authentication tool for rural people ). The fingerprint and personal details may also be linked to the Aadhaar Card, which will then serve as the ID proof required to withdraw money.

Advantages of Micro ATM
  • According to bankers, the cost of deployment of a micro ATM is lesser than that of an ordinary ATM. ATMs need at least 80-100 transactions a day to be viable as they costs several lakhs. A micro ATM costs less than Rs 20,000. ( cite copy, and link)
  • It is portable
  • Micro ATM has connectivity through GSM, hence it can travel from village to village, said Das during a press interaction on Monday.
  • Biometric enabled secured transactions
  • Interoperable device and can work for any bank

Micro ATM can be used for the following banking utilities
  • Account opening
  • ATM card transaction
  • eKYC
  • Aadhaar enabled payments (AEPS)
  • Cash withdrawal/deposit
  • Funds transfer, mini statement, balance enquiry, etc.
  • Aadhaar seeding
  • Biometric capturing

Some of the non-banking utilities include:
  • Internet and DTH recharge
  • Prepaid and Postpaid SIM card recharge
  • Ticket booking (IRCTC Railways/Airlines/Bus)
  • Hotel booking & much more
Fastpay Payments’s Micro ATMs services are designed as a solution to narrow the banking gap especially for the rural Indians. We are empowering local retailers, shopkeepers and retired banking staff with these devices by enabling financial transactions.