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
