In a year or so, one can expect to get more than cash from automated teller machines (ATMs). While the new White Label ATM (WLA) regime is yet to commence in India, WLA operators and banks are already drawing up plans to lure customers with loyalty rewards so that they revisit their location for all ATM transactions.
“We are evaluating multiple options of differentiating our WLA offering to attract footfalls. These options include loyalty points and other rewards,” said Sudip Kumar, president, Tata Communications Banking Infrasolutions. The company is preparing to apply for a WLA operator’s license to the Reserve Bank of India shortly.
On June 20, the banking regulator had put out guidelines for setting up and running WLAs in India. The last date for applying for a WLA license is October 20. Kumar said the company should be able to roll out its ATMs by the end of current financial year, subject to regulatory processes.
Presently, it is a bank-led model, where the lender has outsourced the maintenance of ATMs which includes identifying locations, acquiring machines and transporting and refilling cash. The outsourcing agency leases out the site in its name and provides the same to the bank on contracted period.
Under the WLA regime, the operator will have the freedom of setting up ATMs under its own identity. So banks, that were already competing with each other for better visibility and penetration through the ATM network, will need to stand out in comparison with WLA operators as well.
“The loyalty points could be converted into discounts or rewards subject to certain conditions like the customer should not access any other banks’ ATM for a month,” said an official of a public-sector bank. An offsite ATM not only provides convenience to the bank’s customers but also adds to the visibility of the bank’s name especially if it is situated on important locations such as railway stations and shopping malls.
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According to RBI norms, WLA operators are permitted to display advertisements and offer value added services. “While running advertisements on the WLA screen would be permitted, such advertisements should disappear once the customer commences a transaction in order to ensure that the customer is not distracted in any way during the process,” RBI said in the guidelines.
In order to qualify as a WLA operator, the non-bank entity should have minimum net worth of Rs 100 crore. The company would also need to tie-up with a sponsor bank to take care of the transaction settlement. Cards issued by all banks will be acceptable at WLAs. The current limit of five transactions at non-bank ATMs a month will be inclusive of those effected at the WLAs.