Micro-ATMs

Micro-ATMs are portable devices that allow banking transactions including cash deposit, withdrawal and fund transfer using debit cards. The micro-ATM identifies the customer through an identity proof, generally the Aadhaar, which is linked to their bank account. The bank representative carrying the machine acts as the cash cache. The micro-ATM also prints a receipt for all transactions.
Understanding Micro ATM and how it works in rural India

Ever since demonetization happened;Micro ATMs have been the buzz word. Micro ATM looks like a card swiping machine but is able to offer banking without the bank to the last mile. Banks can remotely connect to their core banking system through this machine. Micro ATMs work like handheld point of sale (PoS) terminals which can be specifically used to disburse cash in remote locations or rural areas.

The micro ATM machine comes with a fingerprint scanner attached to it and has the ability to scan Aadhaar details. This helps banks and payment solution companies to connect with the large unbanked sector effectively.

These machines are typically used by business correspondents (agents who represent banks in rural areas) of banks to connect customers who are far away from branches. The agent (a businessman or a shopkeeper) acts as the cash disperser for the ATM. He collects deposits and feeds in data and also pays out from his pocket and debits the account. There are no service charges for using Micro ATMs.

Micro ATMs are expected to be viable where ATMs are not. ATMs need at least 80-100 transactions a day to be viable as they cost several lakh and have monthly operating expenses such as account rental, telecom charges, AMC costs, electricity expenses and security guard. A micro ATM costs less than Rs 20,000. Since connectivity is through GSM, the agent can carry it and travel village to village at set times.