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5 Biggest Challenges in Penetration of ATMs in Rural India 2021

India’s rural population is 65.53% of the total population. Most of the rural population is unbanked. Despite technological advancements and emerging fintech companies, still cash is ruling in the rural economy. There are several reasons why people in rural India are using cash for every transaction. They don’t keep their money in their bank accounts as they have to walk miles to withdraw cash from ATMs or banks. Due to the shortage of proper infrastructure, the paucity of financial literacy, and dependence on others, they prefer to use cash and are willing to stay unbanked. If ATMs would be penetrated near their residential areas, they would find it more convenient to transact money instead of going to distantly located bank branches. Deployment of ATMs are not as easy as it seems and here are 5 major challenges in the penetration of ATMs in rural India: 

  1. Unavailability of constant electricity/power supply: 

 The frequent power cuts and lack of electrical infrastructure make rural people stay in acute darkness. This is the biggest challenge that the government faces while deploying ATMs in rural India. Improper planning, electricity theft, lack of political help, less use of renewable sources of energy, and non-uniform electrification are some of the reasons for the unavailability of constant electricity or power supply. So In many rural areas, they use solar power to some extent. To penetrate ATMs in rural India, a constant electric supply is needed.   

  1. Security and cases of Theft & Robbery

 In rural areas, where ATMs are located in some distant places and people are hardly seen near banks or other financial structures, security is the main concern. Also, as the penetration of ATMs increase, the chances of fraud and crimes can become a major concern. There are many cases when a group of thieves picks up the entire ATM. Another crime like snatching a card or cash from the person, blackmailing, or scaring the person for money is frequently happening. 

  1. Slow deployment of ATMs:

 The population of rural India is increasing at a rapid rate but the deployment process is very slow. There are many layers through which the order of deployment passes through and as a result, we see few ATMs in semi-urban or rural areas.  

  1. Financial Illiteracy among rural people

 Most of the rural people work on farms or manage household chores. They don’t know how to deposit money in bank accounts or withdraw money. The lack of literacy is another big challenge as it causes other major issues like theft and exploitation of the innocence of rural people.  

  1. Lack of qualified managing staff

 Many times the ATMs stop working properly and technical issues start occurring. At that time, qualified staff is needed to correct the issues. In rural areas, it is difficult to find any qualified managing staff as well. 

 Alternatives of ATMs: 

 Micro ATMs  

They are similar to ATM in functionality but mATMs are portable and easy to operate as compared to ATMs. The customers can swipe their debit cards to make daily transactions and this Aadhaar micro ATM price is also affordable that one can easily purchase for their retail shops. The only thing a person has to do is connect mATM with their mobile phone via Bluetooth.  

 Aadhaar enabled Payment System:  

 iServeU AEPS is an easy-to-operate, bank-led model that permits online fund transactions at PoS (Point of Sale) through the Business Correspondent (BC) using your  Aadhaar card or 12- digit Aadhaar number or finger impression. You can avail of the Aadhaar services by opening a new bank account by providing KYC (Know Your Customer) information. Also, your Aadhaar number should be linked with bank a/c. 

 If you own a retail shop, work as an agent, or want to provide ATM services to people living in your locality, you can opt for iServeU micro ATMs which are available at affordable prices, or you can choose the AEPS white label portal and generate an extra source of revenue by earning commission on every successful transaction. For more info, feel free to visit or call us on +918338088000.