In conversation with KR Bijimon, Chief General Manager, Muthoot Finance, who talks about the future of ATM franchising.
With commercial real estate proving to be a more lucrative investment than residential property because of the higher rate of return, ATM franchising is soon gripping owners who want to rent out their space to a white-label ATM provider. In a brief interaction with Franchise India, KR Bijimon, Chief General Manager, Muthoot Finance, discusses the perks and future of this surfacing business.
What is the size of your industry?
The market size of the Indian ATM Industry by number of ATM terminals is around 2,37,000 as of Nov 2017 comprising of deployments by Direct Member Banks, Sub Members, RRBs and White Label ATM operators with direct Member Bank based installations constituting a majority share (around 90%).
Tell us the USP of ATM franchising industry and what is favouring its market growth?
ATM franchising is an opportunity for people to fetch additional income with minimal or no efforts. The USP of this model lies in the fact that since the franchisee remuneration is based on the transactions at the ATM, the franchisee is always enthusiastic by the idea of better returns with the increase in transactions as opposed to fixed rental in the traditional model. For ATM operators, a sense of ownership that gets infused in the franchisee with the very nature of the model leading to a better performance, makes the model a win-win.
How do you see the industry in the coming years?
With cash still being the king for Indian consumers given it being the most preferred payment method, the industry as a whole shall keep up the momentum. With the increasing thrust on digital payments, ATMs shall gradually evolve from pure cash dispensing machines to multifunctional terminals capable of supporting a gamut of value added services like interoperable cash deposits, card-less withdrawals, bill payments, financial instruments like pre-approved loans and credit cards, insurance etc.
Area Required - 30-40 Sq. ft (Shop in Shop); Around 60-80 Sq. ft (Counter ATM)
Expected Breakeven - 100 plus transactions on a daily basis