Research Analyst
Nov 19 - 25, 2012

ATMs constitute the primary point of cash provision and their numbers continue to increase across the world, especially in regions where financial inclusion is rapidly increasing. The number of services on offer at ATMs in also increasing, as self-servicing models become prevalent in the financial services industry and technological developments are rolled out. From their early beginning as a device purely used for cash withdrawals, ATMs are now being repositioned as a key touch point between customers and financial service organizations, facilitating account management, fund transfers, and non-bank related activities such as lottery entry and charity donations. On the operations side the ATM industry has yet to operate at peak operational efficiency and there remains a deficit of benchmarks from which to gauge the relative success or failure of an ATM estate's operational management.


E-Banking 74,562.11 6,554.90 13 5
RTOB 21,799.92 5,982.51 6 3
ATM 45,202.54 438.14 15 28

The experts found that there is little correlation between the size, location or type of ATM operator and their costs, and no participants stood out as engaging in best practice across their full operations, although there were strong performers in certain areas. ATM industry is undergoing a period of rapid change and technological upgrading, although some operators in mature economies may lag behind because of their extensive and therefore costly to upgrade legacy network and capital expenditure constraints as a result of the economic climate, capital and liquidity requirements.

The experts also indicate that economies of scale do not have a significant effect on the unit costs for ATM operators. The rapid evolution of the ATM industry means that operators are increasingly driven towards the provision of various value added services for customers. The provision of such multifunctional, however, must not come at the expense of a viable business model, since numerous costs such as those for hardware, fraud, transactions and the opportunity cost of cash must be taken into account and reduced through effective management and competitive tendering agreements where appropriate.

In Pakistan, the use of electronic payment system have been increased by the customers having multiple types of accounts in the country as advance mode of transactions are available to them including ATM, online, retail outlets. During the 4th quarter of FY12, payment systems infrastructure showed continuous up-ward growth trend. A total of 197 ATMs were added raising the tally of ATMs in the country to 5,745 whereas the status of 192 more bank branches was up-graded to real-time online branches (RTOB). Currently, 9,291 bank branches or 92.8 per cent are offering RTOB services out of a total of 10,017 bank branches across country.

The number of plastic cards also witnessed an increase of 8.03 per cent compared to the numbers recorded in the preceding quarter. By the end of quarter under review, 17.95 million plastic cards were circulating in the country. The volume of overall e-banking transactions in the country during the quarter under review was registered an increase of 5.6 per cent to reach 74.6 million. However, the value of transactions at 6.6 trillion was 4.4 per cent less than transactions reported in the quarter ended March 31, 2012 due to a 5.4 per cent decrease in RTOB transactions. However, the volume of transactions increased slightly by 1.8 per cent. In terms of volume of overall e-banking transactions, ATMs with a major share of 60.6 remained the leading channel. ATM transactions value and volume also showed an increase of 5.9 per cent and 7.4 per cent respectively. The average value per ATM transaction stood at Rs. 9,693. The volume and value of transactions through POS terminals stood at 4.7 million and Rs. 21.49 billion depicting 4.5 and 2.1 per cent growth respectively as compared to the figures recorded in the previous quarter.

The volume of large value payments through RTGS transactions aggregated to 101,779 and in terms of the amount worked out to Rs.28.97 trillion. This showed an increase of 4.8 per cent in volume and 3.6 per cent in the value as compared to figures reported during previous quarter. The major portion of RTGS transactions continued to be in respect of settlements against securities followed by Inter-bank funds transfers and settlement of retail cheques through multi-lateral clearing contributing 53.6 per cent, 34.2 per cent and 12.1 per cent respectively.


ATMs, which are considered to be a source of convenience for the customers, become source of annoyance when found out of order and long queues of customers could be seen at ATMs in Pakistan, particularly on salary and occasion days. Bank authorities rarely pay attention to the complaints of customers, and messages like out of cash, sorry for inconvenience, ATM is closed for maintenance work, link is down, service is not available, and your transaction could not be completed due to software problem are normally seen displayed on the screens of ATMs. Situation at ATMs of public sector banks is pathetic. When the customers contact the bank officials they advise us to visit the nearby bank. In spite of repeated complaints no relief is being provided to the customers.


Robbers openly challenge the security forces and snatch money from the people when they get money from ATMs. Now, the People are afraid and never go to an ATM alone, especially at late hours. Government should affix the cameras which should cover the whole area where the ATMs are situated for decline the ratio of snatching.