Pakistan’s ATM Network Crosses the 14,000 Milestone

Pakistani banks have expanded their network of ATMs to more than 14,000 by the end of the financial year 2017-18 in order to meet the demand of cash withdrawals and fund transfers to their customers in different cities of the country. According to the State Bank of Pakistan, the number of ATMs owned by 32 commercial banks increased to 14,019  which includes conventional banks and Islamic banks. These banks added 1,330 ATMs at several locations of different cities during the said period showing a double-digit with a year-on-year growth of 11.5 percent. The number of ATMs stood at 12,689 by end of 2016-17. The decreasing cost of ATMs has also pushed banks to enhance their networks in order to provide services to their customers. However, the operating costs of ATMs are quite high in Pakistan as 24/7 services are required even though electricity and internet services are quite unreliable. ALSO READ A New Wave of ATM Scams Forces FIA to Take Action Out of these ATMs, 11,366 (81.1%) were On-site ATMs whereas 2,648 (19.9 %) were Off-Site ATMs, installed at corporate offices, hospitals, shopping Malls etc. Moreover, 4 mobile ATMs were also operational. There are 2,324 ATMs, which are also equipped with sensors for biometric authentication. Furthermore, there were 52 Cash Deposits Machines (CDMs) with 34 CDMs with dual functionality of cash withdrawals and deposits. All these ATMs are connected with one ATM interoperable Switch i.e. 1Link. As a core banking touch-point and major enabler for access to funds, ATMs are still playing a central role in the broad context of modern banking. The wide selection of services like cash withdrawals, funds transfers, and utility bill payments etc. are quite popular on ATMs in the recent years. Despite the availability of a wide range of services on ATMs, cash withdrawals still have the highest volume and value of transactions. This channel leads to reduce the reliance on branches in the banking industry. In total e-banking transactions, ATMs has the largest share of 62.2% in the volume of transactions with a value share of 11.7% among different other sources of e-banking including POS, mobile and internet banking. During the year FY18, ATMs processed Rs 470.6 million in transactions amounting to Rs. 5.5 trillion. These transactions showed a YoY growth of 18.3% by volume and 21.6% by value. As the number of ATMs in the country is growing, the size of ATM transactions, as well as the number of transactions per ATM, are witnessing a rising trend. During the year under review, the average size of an ATM transaction was approximately Rs. 11,793 per transaction and 33,567 transactions were processed per ATM. The trend of ATM transactions showed that both the volume and value of ATM transactions are also growing. Further, the ratio of On-Us versus Off-Us Cash withdrawal transactions was approximately 61:39 by volume and approximately 67:33 by value which shows that customers generally prefer to withdraw cash from their own bank’s ATMs.