First National Bank is in the process of installing 2 000 mini-ATMs by the end of this year. When completed, the bank will have doubled the size of its ATM network to 4 000 in just two years.
The mass mini-ATM rollout will enable FNB to better serve its growing social grant payment customers while bringing banking services to areas that to now have been underserviced and underbanked.
The mini-BOB ATM is a small electronic terminal which allows for withdrawals or balance enquiries. They are installed in shops and retailers.
Instead of dispensing cash, though, it issues a receipt which is then cashed in the store.
FNB’s new mini-ATMs dramatically alter the traditional ATM business model which in the past has prevented them being deployed in rural areas.
Typically, a full service ATM is a sophisticated and expensive electro-mechanical device that needs to do over 6 500 transactions a month in order to be cost-justified. Ongoing costs include a data line, security and cash in transit delivery charges which increase dramatically with the distance covered.
FNB says the new mini-BOB ATM is a simpler, more cost-effective device that carries no cash and, apart from a phone line and paper rolls, has virtually no operating costs.
“The challenge for banks in finding ways to better service the underbanked has been finding innovative alternatives to existing electronic banking channels or branch outlets,” says Jean Ochse, head of FNB’s Self Service channel.
“FNB’s solution enables us to dramatically increase our penetration into the rural areas of South Africa.”
Recently, FNB concluded an agreement with the Eastern Cape Government to open free banking accounts for social grant recipients. The cost of these accounts is subsidised by the provincial government and account holders pay no FNB ATM charges or monthly service fees.
FNB’s head of Strategic Delivery, Kim Jenkins, says the mass deployment of the mini-BOB ATMs into rural areas will cut down the travelling time for pensioners to access their social grants and reduce time spent in queues.
“It will also serve as a boost for local economies. FNB’s increased reach of banking services means that money will be retained and spent in local communities instead of going to the nearby towns,” says Jenkins.
FNB expects to conclude similar social grant payment agreements with other provincial governments. – I-Net Bridge