In India, Trailing 12-month ATM withdrawals have hovered around US$350-400bn in the last 2 years. In comparison, the total value of card transactions at POS (trailing 12 months) was US$100bn in April-17 (vs US$50bn 2 years ago), while mobile wallet transactions were US$9bn (in April-17) (vs US$1bn 2 years ago).
We believe greater adoption of digital payment tools (like mobile wallet, IMPS/UPI, card transactions at POS, mobile banking) could affect the share of ATM withdrawals.
The Indian consumer payments market could be segmented as:
a) a segment that earns digitally (ie income straight into the bank or income earned in cash but then deposited into a bank) and then spent either via a card swipe at a POS terminal or withdrawal from an ATM and then spent in cash; and
b) a segment that earns and spends in cash (hence not part of formal banking channels).
We only look at the first point here, where individuals could pay digitally rather than withdrawing cash from an ATM.
