It has been 40 days since the 'historic' demonetisation announcement by Prime Minister Narendra Modi and there are still long queues in front of ATMs. People are still doing the rounds of empty ATMs with 'Out of cash' signs stuck to their doors. The situation remains woeful.
A new term, meanwhile, has been doing the rounds -- MicroATM. What are MicroATMs and how can they help?
What are MicroATMs?
MicroATMs are the new avatar of Point of Sales (PoS) machines. While traditional ATMs hold cash in the machine, here the cash is held by a human being. To get cash, you swipe your card like you do at any retail outlet.
How do they work?
You swipe your debit or credit card like you would in a PoS machine and the man hands you in cash the amount you keyed in the machine. The government and companies such as Jio are planning to roll out Aadhar card based MicroATMs. In these ATMs, the authentication will be carried out through the biometrics registered during the Aadhar card process.
A MicroATM can be located at any retail merchant's place. Or, even in a mobile bank van with bank personnel inside it. Bank officials can even take cash from people and deposit it in their accounts.
Where can one find a working MicroATM?
Last month, Big Bazaar announced that its 260 outlets will allow people to withdraw money by swiping their debit cards. Select petrol pumps are functioning as MicroATMs too, where people can withdraw cash. OLA cabs has partnered with Yes Bank to deliver the cash to people's doorstep. This month, Reliance Jio announced that it is working on rolling out Aadhar based MicroATMs. Companies such as AGS Transact Technologies are working on the back-end to provide technical support to MicroATMs.
Will MicroATMs help ease the cash crunch?
While MicroATMs are a great way to reduce lines at ATM machines, the problem right now is that even banks do not have enough cash. Also, the number of MicroATMs in the country right now is just 130,000.
"Anyone who can get an Aadhar card can get an instant bank account, anyone with a bank account can transact at a MicroATM, anyone with a feature phone can do a transaction with the USSD channel, and someone with a smartphone can use the UPI to make payments," Nandan Nilekani, adviser the Prime Minister, said in a recent interview.
What are the risks?
There are security concerns about linking Aadhar to MicroATMs and the scope for fraud. Also, handing over large amounts of cash to a single personnel without any security could invite problems.
Right now, MicroATM is in the baby stage and it is remains to be seen whether its large scale adoption is practical and whether that will help in easing the cash crunch that is plaguing all of India.