Disadvantages of White-Label ATMs
While White Label ATMs (WLAs) offer several advantages, they also come with certain disadvantages.They are-
- Tedious dispute resolution: The main issue in WLAs is unsuccessful transactions. In any event of a dispute, the dispute resolution method will be very complex as it include three entities, namely the WLA operator, the WLA operator’s sponsor bank, and the customer’s bank and this take a lengthy time and customer has to face this problem.
- Limited free transactions: Only a limited number of free transactions are permitted on the WLAs. WLAs charge specific fees from customers and Customers will be discouraged by the cost issue, as they will be obliged to pay a price to use the White Label ATMs
- Competition from bank operated ATMs: WLAs have still not managed to set a repute among the rural population as people still prefer transacting from bank-managed ATM. It i seen that in case there is WLA ATM and a bank operated ATM, then customers will prefer bank ATM and in such scenarios the White Label ATMs may not be able to generate a profit
- Financial Viability: White label ATMs’ financial viability is under question because of their low interchange charge and hefty operational expenses, for the same reason two of the eight entities to whom Certificate of authorization was issued, surrendered their COA as this didn’t turned out to be a profitable venture for private entities.
White-label ATM
White-label ATM: The concept of white-label ATMs facilitates collaboration between non-banking entities and traditional banks. These ATMs are designed to be interoperable, meaning customers from various banks can use them for transactions. This interoperability enhances accessibility and convenience for users, especially in areas where traditional bank-branded ATMs may be limited.
Table of Content
- What is a White-label ATM?
- Features of White-Label ATM
- Reasons behind the Introduction of White Label ATM by RBI
- Objective of establishing White-label ATM
- White-Label ATM operator in India
- Different types of ATMs which are available in India
- Advantages of White-Label ATMs
- Disadvantages of White-Label ATMs
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