Cashless policy: High Cost May Hinder Deployment of Deposit Taking

Cashless policy: High Cost May Hinder Deployment of Deposit Taking

High cost may hinder the deployment of deposit-taking Automated Teller Machines in the country, our correspondent has gathered. Deposit-taking ATMs are specialised cash deposit machines, which accept cash, count them and credit them into customers’ accounts immediately.

Though, the Central Bank of Nigeria has introduced the cash-less policy with the aim of reducing the volume of cash in the economy, cash transactions still represent over 99 per cent of customer activities in banks across the country, according to the apex bank.

The CBN also said out of 214.7 million transactions via e-Payment channels in the country, over 109.5 million were still being done via ATMs. However, almost all of the transactions on ATMs are cash withdrawals.

The Director, NCR, an ATM manufacturing company, Mr. Bill Allen, said, “Only about 10 per cent to 12 per cent of ATM transactions are deposits.” In spite of this, experts expect banks to deploy ATMs with automated deposit functionality to increase customers deposit and encourage adoption, while other e-Payment channels are developed. The CBN had directed the country’s banks to deploy 75,000 new ATMs between 2012 and 2015.

The Deputy Governor, CBN, Mr. Tunde Lemo, said this was part of the strategies aimed at strengthening available modes of e-payment as well as boosting the cash-less initiative.  While the banks are trying to inject 75,000 ATMs into the system between now and 2015, a senior official of one of the banks, who did not want his name in print, said deposit taking ATMs might not be a priority for the banks in the country, considering the huge cost of deployment.

Though First Bank of Nigeria Plc and Guaranty Trust Bank Plc are leading the way in the deployment of cash deposit ATMs, the source said the other banks had been quiet about it because the cost of deploying the specialised ATMs was prohibitive. He recalled that 60,000 Nigerians currently depended on one ATM, whereas the ideal situation should be 15,000 people to one ATM.

As such, he said the banks would definitely deploy new ATMs but was not sure deposit-taking ATMs would be widely deployed. First Bank of Nigeria said it had deployed deposit-taking ATMs in key locations and would continue to add new locations by the day. The focus, the bank said, was to embark on massive rollout of deposit-taking ATMs in commercial centres across the country.

The bank said deposit-taking ATMs were expected to leapfrog and possibly compete with the basic cash withdrawal ATMs in the country. First Bank said the deposit-taking ATMs it had deployed recognised the Nigerian currency and accepted all denominations ranging from N100, N200, N500 and N1,000 notes.

GTB, in conjunction with Interswitch, said it had also given its customers an edge with it deposit enhanced ATMs. Experts said ATM would continue to be relevant in Nigeria despite the cash-less economic policy because of the country’s huge cash-based informal economic sector.

The Managing Director, Softworks Limited, a major supplier of Wincor Nixdorf ATMs, Mr. Iniabasi Akpan, whose company has deployed over 1,000 ATMs in the country, said such facility would still be relevant in the scheme of things as the cash-less system gained acceptance in the country.

“I still think ATMs will be relevant in times to come. At least, there is no society that is 100 per cent cash-less. Even in developed countries where you are quick to think that all transactions are done electronically, you will find out that people still withdraw cash from the ATMs,” he said.

The Softworks boss said operators could still triple the number of ATMs currently available in the country over time but explained that cash deposit ATMs had yet to become prevalent.

Besides, he lamented that the supply market of the regular ATMs had experienced a lull in the past two years, adding that suppliers were counting on the cash-less economic policy for a rebound.

“Obviously, there will be a decline in the volume of cash that people carry about as long as other e-Payment channels are open. This is because people will not carry cash if they know they can transfer money using other e-channels such as Point of Sale, web and mobile, among others. I don’t think ATMs will become extinct anytime soon,” Akpan said.

THE PUNCH had recently reported that banks would spend over N225bn on the deployment of 75,000 new ATMs.

Our correspondent gathered that the cost of deploying new ATMs, might go up as the cash-less initiative was expected to drive the deployment of more advanced ATMs specifically designed for high transaction volume with intelligent cash deposit solution.

The Sales Manager, Computer Warehouse Limited, the hardware arm of the Computer Warehouse Group, Mr. Olatayo Ajayi, said one of the reasons why ATMs would not become extinct in the country was because the channel was like a combination of a Point of Sale, Internet access point, as well as cash dispensing and deposit  machine.


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