Bankers target 25-30% increase in footfall at ATMs after UPI-ATM services

UPI ATM

Banks are expecting an increase in footfalls in ATMs after the launch of the UPI ATMs (Automated Teller Machines). Hitachi Payment Services launched India’s first UPI-ATM, in association with the National Payments Corporation of India, on September 5, during the Global Fintech Fest in Mumbai, offering secure cardless cash withdrawals.

"We are expecting an increase of 25-30 percent in the footfall at ATMs after UPI ATMs through ICCW (Interoperable Cardless Cash withdrawal) technology, certified by the National Payments Corporation of India (NPCI)," says Joydeep Dutta Roy, Executive Director, Bank of Baroda to Moneycontrol.

At present, the State-owned Bank of Baroda (BoB) has enabled the UPI ATM facility at over 6,000 ATMs across the country.  UPI, or Unified Payments Interface, is an online platform operated by NPCI that enables instant transfer of money between bank accounts.

So far, 17 banks have received certification for the ICCW (Interoperable Cardless Cash withdrawal) technology from the National Payments Corporation of India (NPCI). Out of which some have already  gone live with the feature while some are yet to start.

City Union Bank, is among the early banks that went live with this feature in more than 800 ATMs so far. "We have already enabled this feature in more than 800 ATMs, and we are expecting to complete this in all 1,600 ATMs by the end of this year, "says Sankaran G, Chief Technical Officer (CTO) of City Union Bank.

"BOB's goal is to enable UPI-based cash withdrawal capabilities in approximately 7,000+ ATMs deployed across the country by March 2024," says Roy.

A senior official of the Indian Overseas Bank and UCO Bank confirmed to Moneycontrol that they have filed the request to NPCI to get ICCW and they are expecting to get it by next month, after which they will go live.

Bank of Baroda is witnessing an average of 1,000 daily UPI transactions on their ATMs.

"UPI transactions at ATMs may further improve with the onboarding of more issuer banks and UPI apps. Customer awareness of UPI ATM functionality will also play an important role in improving UPI ATM transactions," said the Executive Director of Bank of Baroda.

City Union Bank is witnessing 300 average daily UPI transactions on their ATMs.

Sanjay Sharda, Head of Consumer Banking, Utkarsh Small Finance Bank, said that they have gone live at three locations so far, but will be live in all ATMs by December 2023.  "We are expecting a 25-30 percent increase in footfall. Also, we may replace them with small white label ATMs, which will be fully for UPI transactions only, "he added.

"We are expanding our UPI features at our ATMs. Currently, more than 1,500 ATMs have been enabled. By the end of this year we will complete UPI features our all ATMs across India," said AR Raghavendra, General Manager of Digitalisation, Union Bank of India.

"I'm sure that this will lead to an increase in the footfall of customers at ATMs, also this will lead to migration from debit cards to UPI," he added.

The UPI-ATM offers the same ease of transacting as the option of cardless cash withdrawals provided by several banks.

“Through the Interoperable Card-less Cash Withdrawal (ICCW) feature at ATMs, any bank account holder can withdraw cash using UPI App. While there are a few banks offering this facility at their ATMs, the UPI – only ATM offers a seamless digital experience as the ATM machine and the software are specifically designed for UPI transactions.” said Sumil Vikamsey, Managing Director and CEO - Cash Business, Hitachi Payment Services, a subsidiary of Hitachi.

"The launch of the UPI-ATM will mark a significant milestone in banking services by seamlessly integrating the convenience and security of UPI into traditional ATMs,” the NPCI said.