WHITE LABEL ATMs (WLA)

About:

• ATMs set up, owned and operated by non-bank entities are called White Label ATMs.
  
  
• ATM vs WLA (White Label ATM):
  • WLA do not accept cash deposits at present.
    
    
  • In WLA, logo displayed on ATM machine belongs to WLA Operator instead of a bank.
    
    
  
  
  
• Salient Features:
  • Customers from any bank can use WLA, provided they pay a fee for using the service.
    
    
  • Their operators have the autonomy to decide locations and create their own brand.
    
    
  • 100% Foreign direct Investment (FDI) is allowed in WLA operations, subject to certain conditions.
    
    
  • Reserve Bank of India’s permission under the Payment and Settlement Systems (PSS) Act 2007 is required for setting up WLAs.
    
    
  
  
  
• Significance: RBI allowed WLAs to promote financial inclusion. India, with 17 ATMs per lakh, ranks among the lowest in terms of ATM penetration when compared with China (63), Japan (107) and USA (173).
  
  
• Present status:
  • In 2013, first white label ATM in India was inaugurated. 39 lakh white label ATMs were deployed in the country during the last financial year.
    
    
  • Some of the key WLA Operators in India are Tata Communication Payment Solutions (operating under the Indicash brand), Muthoot Finance etc.
    
    
  
  
  
• Challenges: Key challenges are shortage of cash supply, low static interchange fee and increase in Digital transactions (including POS and m-wallets) post demonetisation.
  
  

https://www.thehindu.com/business/cash-supply-stress-cost-pressures-hurting-growth-of-white-label-atms/article24604369.ece