What are White Label ATMs and how is it different from ATMs?
ATMs set up, owned and operated by non-bank entities are called "White Label ATMs" (WLAs).
Automated Teller Machines (ATMs) set up, owned and operated by non-bank entities are called "White Label ATMs" (WLAs). They provide the banking services to the customers of banks in India, based on the cards (debit/credit/prepaid) issued by banks.
Tata Communications Payment Solutions Limited (TCPSL) is the first company authorized by RBI to open WLAs in the country. It got launched under the brand name 'Indicash' on 27 June 2013 in Chandrapada, a village located in Vasai-Virar, Maharashtra. The launch of Indicash ('India' and 'cash'), marks a milestone for the country and ushers in a new era of ATM accessibility for the masses across cities, towns and villages. The company has already rolled out over 5,000 ATMs as on Mar’15.
Automated Teller Machine (ATM):
Automated Teller Machine is a computerized machine that provides the customers of banks the facility of accessing their account for dispensing cash and to carry out other financial & non-financial transactions without the need to actually visit their bank branch.
Difference between ATM and WLAs:
In White Label ATM scenario, logo displayed on ATM machine and in ATM premises pertain to WLA Operator instead of a bank. However, for a customer, using WLA is just like using the ATM of other bank (bank other than card issuing bank).
The rationale of allowing non-bank entities for setting up of WLAs:
The rationale of allowing non-bank entity to set up White Label ATMs has been to increase the geographical spread of ATM for increased / enhanced customer service. Prior to WLAs only banks were permitted by the RBI, to set up ATMs.
Services/facilities available at ATMs/WLAs:
In addition to cash dispensing, ATMs/WLAs may offer many other services/facilities to bank customers. Some of these services include:
- Account Information
- Cash Deposit (Acceptance of deposits are not permitted at WLAs)
- Regular Bills Payment (not permitted at WLAs)
- Purchase of Re-load Vouchers for Mobiles (not permitted at WLAs)
- Mini/Short Statement
- Personal Identification Number (PIN) change
- Request for Cheque Book
- Non-bank entities incorporated in India under the Companies Act 1956 are allowed to operate WLAs. In September 2015, Government permitted Foreign Direct Investment (FDI), up to 100%, under the automatic route. Before that, foreign investment in White Label ATMs was being allowed only through government approval route.
- Non-bank entities are permitted to set up WLAs in India, after obtaining authorisation from RBI under the Payment and Settlement Systems (PSS) Act 2007.
- While the WLA operator is entitled to receive a fee from the banks for the use of ATM resources by the banks customers, WLAs are not permitted to charge bank customer directly for the use of WLAs.
- Cash Management at the WLAs is the responsibility of the Sponsor Bank, who may if required, make necessary arrangements for servicing cash requirements at various places.
Is the customer charged for ATM transactions?
With effect from November 01, 2014, Savings bank account holders can do a minimum of three transactions free of charge in a month at other bank ATMs in case of ATMs located in six metro locations, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad. At other locations, the savings bank account holders can transact a minimum of five transactions free of charge in a month at other bank ATMs.
Banks on their own can decide to offer more number of transactions free of cost to their customers. In case of charges to be levied on customers, the customer can be charged a maximum of Rs. 20/- per transaction (plus service tax, if any) by his/her bank.