The Chinese ATM market is already huge, but that did not stop it expanding by 76,000 ATMs in 2012 to reach 415,000 – two and a half times its size at the end of 2008. These new research findings are based on RBR’s ‘ATMs in China 2013” report, which also shows that the ‘Big Four” Chinese banks added a remarkable 46,500 ATMs in just one year.
According to RBR, China remains the second largest ATM market worldwide, but only by the tiniest of margins. In fact, when RBR publishes new global ATM research including the USA later this year it may well be confirmed that China has already taken on the mantle of the world’s largest ATM market.
Customer demand is the main driver of ATM growth in China. Banks are issuing a million new cards every working day, creating unprecedented demand for ATM services. In particular, demand for quick deposit and cash withdrawal is extremely strong, leading to heavy bank investment in ATM infrastructure.
A more unexpected driver of deployment is falling ‘not-on-us” transaction fees – also known as disloyalty fees. Customers are less tied in to using their own banks’ ATMs, which is putting pressure on banks to place more machines in convenient locations, to reduce the costs of customers using other banks’ machines. It also has the benefit of increasing revenues by attracting customers of other banks to use their ATMs.
In keeping with this drive for convenience, the majority of ATMs can be accessed 24 hours a day. Lobbies and unstaffed self-service branches are the fastest growing location types, as banks have reformatted their branches to include lobby areas and have taken advantage of a relaxation of regulations which has made it easier to open unstaffed outlets.
8% of the installed base is operated by non-banks. However, these organisations can only deploy ATMs in partnership with a bank, and following a period of rapid expansion of the non-bank sector, banks are starting to question the profitability of the portion of their estates that is effectively outsourced, and growth in non-bank deployment has slowed.
ATMs in China generally offer high functionality, although a few, mainly large, banks have begun moving non-cash facilities to multimedia terminals, to reduce costs and free up ATMs for cash transactions. An additional complexity in the Chinese market is that banks rarely introduce facilities uniformly across their entire fleet because of regional differences in security, and other regulations.
Account transfer is one of the most widely offered facilities, although it is still in many cases restricted to accounts at the same bank. Interbank transfers are primarily offered by medium-sized banks, which see this as an opportunity to attract customers away from their larger competitors. In response, the large banks are now starting to introduce this facility in some locations.
Increasing ATM security is a priority for both regulators and banks. The share of ATMs equipped with a security camera is growing, as is the proportion of EMV-compliant terminals. Provincial offices of the central bank legislate autonomously, and the patchwork of regulations on recycling banknotes is hindering a more widespread use of this technology.
For all these reasons and the fact that ATM density in many parts of the country is low compared to the national average and to other countries, it is clear that the phenomenal expansion of the Chinese ATM market will continue for several more years to come.
These figures and insights are based on RBR’s “ATMs in China 2013” report, the most detailed analysis ever published of the Chinese ATM market. For more information about this report or to discuss the findings in more detail please email Rowan Berridge (rowan.berridge@rbrlondon.com).
The post China set to overtake the USA as the world’s largest ATM market appeared first on Payments Cards & Mobile.
