Before discussing Bank Owned ATMs, White Label ATMs, and Brown Label ATMs and their differences, you need to know what an ATM is. ATM stands for Automated Teller Machine; it is an electric machine that operates easily for depositing and withdrawing cash from a bank account.
A customer can easily withdraw cash by making a single swipe of the ATM card and entering a confidential PIN. ATM has made bank account management very easy.
White Label ATMs & Brown Label ATMs
Now, you don’t need to visit a bank branch and fill out a form to withdraw cash from your bank account. You know the term ATM, but we often need clarification when you hear white-label ATM and brown-label ATM.
ATMs are of three types-
- Bank Owned ATMs
- Brown Label ATMs
- White Label ATMs
These ATMs were based on ATM ownership, ATM location, and service agreement of the bank with the service provider.
What bank-owned ATMs?
The bank itself sets up such ATMs. The bank is responsible for its maintenance and upkeep. Banks are responsible for cash loading, AMC, and the security of ATMs.
ATMs are also of two types based on location: (i) ONSITE ATMs and (ii) OFFSITE ATMs.
Onsite ATM – These ATMs are located on the bank branch premises.
Offsite ATM – Offsite ATMs are located away from the bank premises.
They had generally set up at important locations like railway stations, college or university campuses, airports, bus stands, markets, etc., intending to provide easy cash withdrawals to commuters, students, and the general public.
What are Brown Label ATMs?
In the case of brown-label ATMs, the service providers own the hardware of the ATM. The service provider is responsible for identifying the ATM site, the lease agreement with the owner, and the power supply to the ATM kiosk.
Thus, the service provider takes responsibility for managing the ATM, while the sponsor bank takes responsibility for cash management and provides connectivity to the banking network to the ATM.
Brown Label ATM Kiosk will display the sponsor bank logo on the premises. Brown Label ATMs are the most cost-effective solution for banks.
What are White Label ATMs?
White-label ATMs are owned and run by Non-Banking Financial Companies (NBFC). RBI grants licenses or permission to non-banking institutions to open such ATMs.
Any non-banking entity with a net worth of at least ₹ 100 crores can apply for a white-label ATM. NBFCs rely on the sponsor bank to resolve all issues related to cash management, settlement of transactions with other banks, etc.
Customers with bank debit cards can withdraw cash from such ATMs but are subject to service charges. Unlike brown label ATMs, white label ATMs do not display the logo of any bank like SBI, CANARA BANK, PNB, ETC. Logo of white-label ATM operators like Tata IndiCash, Muthoot Finance, etc.
Note: Tata Communications Payment Solutions Limited was the first company licensed by RBI to open WLAs. They started their chain under the brand name “INDICASH.” Setting up white-label ATMs is beneficial for customers as well as banks.
With the expansion of the ATM network, there will be more convenient locations for customers to withdraw cash. White-label ATMs also reduce the upfront transaction cost for banks, and there is no hassle in supporting and running such a payment channel.
What is the difference between White Label ATMs and brown Label ATMs?
|White Label ATM
|Brown Label ATM
|ATMs are owned and operated by non-banking entities, but there is no outsourced contract from a particular bank.
|The non-banking entity or WLA operator operates the ATM and pays rent, electricity supply, telecom bill, etc.
|The sponsor bank provides cash to load in the ATM.
|In this also, the service provider takes out such responsibilities.
|White Label ATMs do not have the logo of any bank, but they have the logo of the non-banking entity that owns and operates the ATM.
|The bank that has outsourced the operation supplies the cash for the ATM.
|White Label ATMs do not have the logo of any bank, but they have the logo of the non-banking entity that owns and operate the ATM.
|ATM has the logo of the bank, which has outsourced the work.
|RBI is directly involved because non-banking entities have to get a license/ permission to run such ATMs.
|In this, RBI is not involved directly. The outsourcing company has a contractual obligation with its respective bank.
White-label ATMs (WLAs) are usually operated by non-banks and provide debit card services, such as cash withdrawals and inquiries, just like regular ATMs.
Equally, white-label ATMs are established, owned, and operated by non-banking organizations. Non-banking entities incorporated in India are permitted to operate WLAs under the Companies Act of 1956
The source is cash from any scheduled bank, including cooperative and regional rural banks. Provide bill payment and interoperable cash deposit services subject to technical feasibility and certification by the National Payments Corporation of India (NPCI).
Green ATM provides objective validation of ANSP’s efforts to increase sustainability and environmental stewardship and, in doing so, builds credibility with the public and other stakeholders.