ATM nation

A few years ago it was the sight of a cellphone on every other hand that stunned an outsider in India. These days it must be the mushrooming of ATMs.

In most major cities, but also in Tier-2 cities, you can't walk 500 feet without passing an ATM. In one Tier-2 (or is it Tier-3 ?) city, I crossed 6 ATMs in a distance of around 300 ft.

Estimates vary, but the mean guess is that India now has around 25,000 ATMs as againt just 500 a decade ago. The forecasts also are all over the place, with the most optimistic expecting the number to double in around 7 years. I feel all these predictions will be beat soundly. India is likely to cross 75,000 in 5 years, and may well cross 150 thousand in 10 years. As far as penetration/density goes, India is still way far behind China. So there is definitely room to grow.

ATMs, like cellphones earlier, provide another way for the country and its people to leapfrog older technology and the lack of infrastructure. In addition, not having to deal with frumpy bank staff is always a mood-lifter.

Most Indian ATMs are from Diebold (DBD), Euronet (EEFT) and NCR (NCR). These two U.S companies could see a new growth phase soon. But they trade like value stocks, and for long-term investors they offer very attractive entry points right now.

ATMs in India have also been localized with additional applications like recharging a prepaid cell phone account via debit, and donating to some well known temples without having to visit them personally. Wonder if paying bribes via ATM is next!