Following the government’s move to scrap older currency notes of Rs500 and Rs1,000, long queues outside banks and ATMs have become a normal sight. One of the measures to deal with cash crunch was the deployment of micro ATMs to help customers withdraw cash. While these are not new, they have gained visibility in recent times.

A portable ATM

It is a slightly modified version of a point of sale (PoS) device, on which you swipe your credit or debit card to make payments to merchants. Micro ATMs also have facilities such as fingerprint sensors to verify your identity through Aadhaar-based biometric identification.

This PoS is connected to the bank’s core system, to extract information regarding a user. Such devices are portable and connect with the servers through GPRS, a mobile data technology. In some cases, micro ATMs also let you open a new savings account, using your Aadhaar details,

Apart from dispensing cash, they also let you check account balance, deposit cash and initiate fund transfers to other banks. While micro ATMs let you withdraw cash from the account of any bank, given the current cash crunch some of the lenders are limiting this facility only to their own customers.

How does it work?

Micro ATMs are operated by authorised agents known as business correspondents. The verification is done when you swipe your card and enter the PIN or do a biometric verification.

Once your verification is complete, the device will seek the agent’s PIN. After this, the agent will give you the cash.

Currently, there are no charges for using such ATMs.

Previously, a standard withdrawal charge of Rs20-25 per transaction was applicable, if you had used up the quota of free withdrawal transactions in a month.

Where to find them

In the urban areas, they can be found at retail outlets that banks have tied up with. For instance, State Bank of India (SBI) has teamed up with Big Bazaar for this. Banks are also tying up with cab aggregators to set up these machines inside the cabs.

Challenges

While you are assured of a banking transaction, network-related issues have plagued these devices in some cases. Availability of cash with the correspondent can be an issue even if the device is functioning. Unlike larger ATMs, they may not be able to carry huge volumes of cash. As they need human intervention to give cash, they may not be available throughout the day, only during a certain time slot, say, 9 am to 5 pm.

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