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Electronic Payment and Services (P) Ltd.: Revolutionizing the Indian ATM Industry

CASE STUDY, BANKING & FINANCIAL SERVICES
ET Cases, 18 Pages
AUTHOR(S) : Vandana Jayakumar and Y. Bala Bharathi

Case Preview

Electronic Payment and Services (P) Ltd.: Revolutionizing the Indian ATM industry

 

“We have developed a highly scalable platform and are working to become the leading ATM outsourcing provider in India, where the number of ATMs is expected to grow from approximately 230,000 today to 550,000 by 2021. At the same time, EPS’ market presence and brand equity in the ATM industry and payments industry is growing at an accelerated rate.”

– Mani Mamallan, Founder, Chairman and Managing Director, Electronic Payment and Services (P) Ltd.

 

“ATMs represent vital last-mile financial services infrastructure for many in India, especially those living in rural areas; but despite the high dependence on cash, there are currently only 15 ATMs per 100,000 adults in the country, far less than in other growth markets. The sector is growing rapidly thanks to the Indian Government’s recent emphasis on financial inclusion, and the high growth of card-holders as a result of the new Indian card scheme RuPay. We believe EPS is ideally positioned to deliver exciting growth.”

– Udayan Goyal, Co-founder and Managing Partner, Apis Partners LLP

 

Universal financial inclusion agenda gained momentum in India 2005 onwards after the Reserve Bank of India (RBI), India’s Central Bank, drafted the Financial Inclusion Policy. Indian ATM industry has been instrumental in supporting financial inclusion initiatives of India. Hence, there is an increasing need for expanding the ATM infrastructure aggressively to drive financial inclusion at a faster pace. Outsourcing of ATM services brought in the much-needed rigor to the expansion of ATM infrastructure. The Indian Managed Services and Outsourcing industry has been playing a key role in faster expansion of ATM network to achieve the last mile financial inclusion.

Though there are many established players like Tata Communications Payment Solutions Ltd. (TCPSL), Financial Software & Systems (FSS), etc., operating in the ATM Managed Services and Outsourcing space, Electronic Payment and Services (P) Ltd. (EPS) which is one of the youngest players has been playing a key role in supporting the financial inclusion initiatives of India by expanding the ATM infrastructure at a rapid pace. Despite being a start-up, it successfully won the Ministry of Finance (MoF) contract during the initial years of its journey and was the first company to deploy the first live ATM for the project in July 2012 and also stood first among all vendors in single-cluster overall deployment of ATMs for the project in Maharashtra. Certain practices/tools that enabled its success in the ATM outsourcing business are Transaction-based Revenue Model, Business Intelligence Tools (Analytics) and EPSecure. Because of its commendable contribution to the ATM industry, it bagged many prestigious awards within a short span of 5 years........

ATM Industry Landscape

ATMs were introduced in developed economies during 1960s. Over the decades with incessant innovations, ATMs have evolved and changed from being mere cash dispensers to multi-utility service providers by offering a much wider range of services. A 2014 Allied Market Research Report predicted that the global ATM market would reach $21.9 billion by 2020, forecasting an annual 7.6% growth rate. As per the 2015 Global ATM Market Report.........

Indian ATM Outsourcing Drive

In 1987, the Hong Kong and Shanghai Banking Corporation (HSBC) installed India’s first ATM in Mumbai, heralding the beginning of the Indian ATM industry. During the initial years, it was mandatory for banks to get the RBI license for setting up the ATM, as it was perceived much like any other branch. Banks used to deploy ATMs on their own. During 1990s, private sector banks increasingly used this channel to enhance brand visibility. Public Sector Banks (PSBs) joined the fray during 2000s with the decline in machine costs............

Mani Mamallan: The Architect behind Indian ATM Systems

Acknowledged as the ‘The Architect behind Indian ATM Systems’ and honored with the ‘Entrepreneur of the Year 2015’ award by Silicon India, Mani Mamallan (Mani) is the Founder, Chairman & Managing Director of EPS. Throughout his three decades of experience in the Indian ATM industry, he was instrumental in the growth of the industry. His contributions to all major milestones of ATM industry are quite commendable.............

Electronic Payment and Services (P) Ltd.: A Dedicated Deployer

Founded in 2011, EPS specializes in the retail banking & technology domain by offering end-to-end ATM Operations & Outsourcing Services, ATM Managed Services Centre (24x7x365), Transaction Processing Services and Card Management Services thereby enabling banks to concentrate on their core banking functions. Headquartered in Mumbai, the financial hub of India, EPS was launched with an aim to bridge the gap in demand for efficient, secure and technology driven products and services for the banking industry............

Setting New Standards

EPS has set several milestones to its credit since its inception. In 2012, it deployed the first live ATM among all the vendors who won the bid for MoF project. In 2013, EPS set a record for deploying 1,000 ATM machines in 60 days. EPS deployed the largest number of ATMs in a single cluster for the MoF’s Project in Maharashtra by July 2014. It is the first Regional Board Member (India Chapter) of global ATM Industry Association (ATMIA) in 2015 (Annexure III).............

Ensuring Efficient Operations

EPS’ successful operations start with the identification of right ATM site. It has a team of professionals who identify the site and does the survey with respect to its visibility and safety perspectives. They are also vigilant of the fact that the selected site should attract higher footfalls. The team chooses to select busy residential, commercial and workplaces rather than deserted areas. Once the site is identified, branding is the next important criteria as it increases the visibility and branding is done in a manner that customers easily identify the ATM location. Once the deployment of ATM is done, necessary infrastructure such as UPS, VSAT would be installed and ATM would be connected to the bank switch. EPS’ technology partners would cater to its technological requirements (Annexure V).................

EPS’ Centralized Managed Services Center: Monitoring, Analyzing and Reporting

Apart from providing end-to-end ATM services to banks, EPS developed its own specialized monitoring tool on technology and automation platform, as well as business analytics tools, which help management in decision-making. In 2014, the company launched “Centralized ATM Managed Services Center” with the aim of improving ATM operations, thereby enhancing the value of its projects.............

Challenges Galore

As EPS has been growing at a rapid pace, it had to encounter several challenges on its journey. Initially, when the company started, the biggest challenge was fund raising. However, the credibility of the leaders came in handy. Mani’s long standing association with the bankers, customers, community, vendors, ATM manufacturers, etc., helped in raising the necessary capital. As EPS evolved from a start-up company to a matured company, it witnessed explosive growth. Sustaining the growth momentum in the era of ever increasing operational expenditure is one of the other challenges...........

The Way Forward

Despite the challenges, EPS success formula is driven by its passion, technology and performance. EPS stands for all the professional commitment to all the stakeholders in the ecosystem. Thyagarajan Seshadri, President, Banking Relationship, EPS avers, “EPS is not only one of the very few companies that make things happen, it also makes things better for customers, stakeholders, investors, employees. As EPS moves on to the next platform, the company would be looking at acquiring companies, entering into other areas of payment systems, etc.”...........

Assignment Questions

I. Trace the emergence of new business opportunities for the ATM Managed Services and Outsourcing industry vis-à-vis Government of India’s financial inclusion initiatives.
II. Based on the information provided in the case study, analyze EPS’ business model. How significant has been the role of leadership in building a successful business in the ATM Managed Services and Outsourcing industry?
III.............

Exhibits

Exhibit I: ATM Industry Value Chain and Players

Exhibit II: Benefits of ATM Outsourcing

Exhibit III: Details of Ministry of Finance (MoF) Project

Exhibit IV: Customer Testimonials

Exhibit V: EPS’ Growth Parameters (FY2013-2016)

Exhibit VI: Role of Leadership in EPS’ Success

Exhibit VII: Investors’ Funding Timeline

Exhibit VIII: EPS’ Business Intelligence Tool

Exhibit IX: Trending by ATM Age (No. of Cash Transactions)

Annexures

Annexure I: ATM Managed Service Providers Awarded with the MoF Project of ATM Deployment

Annexure II: EPS’ Valued Clientele

Annexure III: EPS’ Industry Associations’ Affiliation

Annexure IV: EPS’ Awards and Recognitions

Annexure V: EPS’ Technology and Service Partners

Teaching Note Preview

Electronic Payment and Services (P) Ltd.: Revolutionizing the Indian ATM industry

 

Synopsis

This case study focuses on the entrepreneurial journey of Electronic Payment and Services (P) Ltd. (EPS), in the backdrop of ‘Indian ATM Managed Services and Outsourcing Industry’. Focusing on EPS, it helps understand the nuances of business and revenue model of players in the Indian ATM Managed Services and Outsourcing Industry. The case study gives an overview of the working of the industry in general and that of EPS in particular. Besides, it discusses the challenges faced by the company despite it being a successful startup and suggests ways in which EPS can overcome these challenges. It also gives an opportunity to use theoretical frameworks such as Michael Porter’s Five Forces Model, SWOT Analysis, etc.

Prerequisite Conceptual Understanding/Before the Classroom Discussion/Viewing

• Visit http://electronicpay.in/ – To have a better understanding of the company being discussed in the classroom

• Students should also have an understanding of the following concepts:

  • • Michael Porter’s Five Forces Model
  • • Operations Model
  • • Revenue Model
  • • Business Model
  • • SWOT Analysis

 

• Students/participants should also view the following videos wherein the senior personnel from EPS share EPS’ growth story and also explain the company’s business analytics tool:

  • • “ET CASES Case Suite on ‘Evolution of the Indian ATM Industry and the Role of EPS’ with Richard Canday”, https://www.youtube.com/watch?v=VkxVv5FXM_Q, August 30th 2016
  • • “ET CASES Case Suite on ‘Indian ATM Industry, EPS and Mani Mamallan’s Experience as an Entrepreneur’ with Mani Mamallan”, https://www.youtube.com/watch?v=6owqLBUK2vI, August 30th 2016
  • • “ET CASES Case Suite on ‘Evolution of the Indian ATM Industry and the Role of EPS’ with Prakash Joshi”, https://www.youtube.com/watch?v=SQ7pLwMSCNw, August 30th 2016
  • • “ET CASES Case Suite on ‘Evolution of the Indian ATM Industry and the Role of EPS’ with S. Thyagarajan”, https://www.youtube.com/watch?v=BaUKROVLKmU, August 30th 2016
  • • “ET CASES Case Suite on ‘Evolution of the Indian ATM Industry and the Role of EPS’ with Vidya Mani Mamallan and Manpritt Kkomal”, https://www.youtube.com/watch?v=mIuBIsgPdME, August 30th 2016
  • • “ET CASES Case Suite on ‘Evolution of the Indian ATM Industry and the Role of EPS’ with Aditya Saavant”, https://www.youtube.com/watch?v=wSGykhvgAVA, August 30th 2016
  • • “ET CASES Case Suite on ‘Evolution of the Indian ATM Industry and the Role of EPS’ with Rohit Jain”, https://www.youtube.com/watch?v=tTPBT37knVY, August 30th 2016

 

Mandatory Viewing for the Faculty (provided along with the Teaching Note)

• “Electronic Payment and Services (P) Ltd.: Revolutionizing the Indian ATM Industry – Interview with Mani Mamallan”, July 22nd 2016
• “Electronic Payment and Services (P) Ltd.: Revolutionizing the Indian ATM Industry – Interview with Prakash Joshi”, July 22nd2016

 

Suggested Reading for the Faculty

• Mark W Johnson, et al., “Reinventing your Business Model”, Harvard Business Review, December 2008 – To examine the elements of a successful business model

 

Case Positioning and Setting

• This case study can be suitably used for MBA Program in Banking and Financial Services – To understand the nuances of operations, revenue and business model of players in the Indian ATM Managed Services and Outsourcing Industry
• This case study can also be used for MBA Program on Startups and Entrepreneurship – To discuss the entrepreneurial journey of Mani Mamallan, the Founder, Chairman & Managing Director of EPS
• This case study can also be used in Management/Executive Development Programs – To understand the dynamics of the Indian ATM Managed Services and Outsourcing Industry

 

Assignment Questions

I. Trace the emergence of new business opportunities for the ATM Managed Services and Outsourcing industry vis-à-vis Government of India’s financial inclusion initiatives.
II. Based on the information provided in the case study, analyze EPS’ business model. How significant has been the role of leadership in building a successful business in the ATM Managed Services and Outsourcing industry?
III. ..............

 

Preamble to the Case Analysis

This case study focuses on the entrepreneurial journey of Electronic Payment and Services (P) Ltd. (EPS) in the backdrop of the Indian ATM Managed Services and Outsourcing Industry. The discussion of the case study is structured to capture the business as well as revenue models of EPS while also highlighting the dynamics of the Indian ATM Managed Services and Outsourcing Industry. The discussion began with an analysis of the industry in general and then narrowed down to EPS, one of the prominent players in the industry. Thereafter, the discussion focused on EPS’ growth story and concluded with suggestions for the company in its way forward. The main discussion points have been captured in Exhibit (TN)-I..........

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Abstract

This case study focusses on the entrepreneurial journey of Electronic Payment and Services (P) Ltd. (EPS) – one of the startups in the Indian ATM Managed Services and Outsourcing Industry. Industry veteran, Mani Mamallan, also known as ‘The Architect behind Indian ATM Systems’, founded EPS in 2011. Supported by the vast industry experience of its founder and other members of the leadership team alongside the financial inclusion initiatives of the Government of India, EPS grew rapidly and its revenues increased from INR8 crore in FY2013 to INR170 crore in FY2016.

Although EPS achieved quick growth, it is faced with the challenge of coping up with this fast-paced growth. What measures can EPS take to overcome this challenge? Further, EPS is led by the vision to be the leading provider of technology solutions in the Retail Banking & Payments System. What are the challenges faced by this young enterprise in its path to achieve its vision and how can it overcome these challenges? This case study focuses on these dilemmas and debates on the roadmap for the company.



Pedagogical Objectives

  • To study the dynamics of Indian ATM Managed Services and Outsourcing Industry
  • To understand EPS’ operations, revenue and business model in being one of the promising players of the Indian ATM Managed Services and Outsourcing Industry
  • To identify the challenges faced by EPS in its vision of becoming a leading provider of technology solutions in the Retail Banking & Payments System

Case Positioning and Setting

  • This case study can be suitably used for MBA Program in Banking and Financial Services – To understand the nuances of operations, revenue and business model of players in the Indian ATM Managed Services and Outsourcing Industry
  • This case study can also be used for MBA Program on Startups and Entrepreneurship – To discuss the entrepreneurial journey of Mani Mamallan, the Founder, Chairman & Managing Director of EPS
  • It can also be used in Management/Executive Development Program – To understand the dynamics of the Indian ATM Managed Services and Outsourcing Industry



This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
$7.31
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