White Label ATMs — Balanced Report

The Reserve Bank of India (RBI) has extended the validity of Vakrangee’s authorization to set up, own, and operate White Label ATMs in India.

ATMs are typically managed by banks. White Label ATMs, on the other hand, are owned and operated by non-banking entities.
Customers can use ATMs operated under this business model for banking transactions regardless of which bank they have an account with.
Under the Payment and Settlement Systems Act of 2007, the RBI approved the operation and inclusion of WLA ATM by non-banking organisations.
It was designed to help expand India’s ATM network, particularly in semi-urban and rural areas.

White Label ATM providers collaborate with banking networks to enable bank customers to use banking services such as cash withdrawals, bill payments, and cash deposits.
White Label ATM (WLA) operators charge card-issuing banks fees in order to provide this service to the bank’s customers.
A lending bank, a sponsor bank that handles settlements, and an ATM network provider are involved in the transaction process in White Label ATM operators.
The cash facility for the White ATM is provided by the Sponsor bank.

Financial inclusion refers to the availability of financial services and adequate financing to low-income people and other vulnerable groups in society.
ATMs promote financial inclusion by providing customers with a variety of banking services at any time and in any location.

Non-banks set up and operate White ATMs in accordance with the RBI’s guidelines for using ‘other bank’ ATMs.
These ATMs accept all domestic debit cards and, depending on the location, offer the first five or three transactions per month for free.
Some companies that operate white label ATMs are listed below:
Indicash – India’s largest White Label ATM network responsible for ‘uberisation of ATMs.’
India1 Payments (BTI Payments Pvt. Ltd.)
Hitachi Payment Services Pvt. Ltd.
Tata Communications Payment Solutions Ltd.
Vakrangee Limited

There are numerous advantages to using White Label ATMs:

White Label ATMs benefit customers because they eliminate the need to visit a bank branch on a regular basis. • ATMs are available 24 hours a day, seven days a week, including holidays.
Banks benefit from this because they do not need to keep a large staff/office (compared to a system without ATMs). It reduces their branch’s operational costs.
It allowed any bank to issue ATM cards that can be used at White Label ATMs.
WLA atm also provides mobile recharge, energy bill payments, and other value-added services.

Limitations of White Label ATMs

There are also a few limitations of White Label ATMs:

A major source of concern is the issue of failed transactions. In the event of a dispute, the dispute resolution method will include three entities: the WLA operator, the sponsor bank of the WLA operator, and the customer’s bank.
Customers will be discouraged by the cost issue because they will have to pay a fee to use the White Label ATMs because only a limited number of free transactions are permitted on the WLAs.
The financial viability of white label ATMs is questioned due to their low interchange charge and high operational expenses.
If a bank-managed ATM is located in the same area as a WLA ATM, the White Label ATMs may be unable to generate a profit.

Source: https://www.livemint.com/money/personal-finance/are-white-label-atms-any-different-from-bank-atms-11632767090946.html