Growth of mobile payments lead to decline in the number of ATMs
March 26, 2019 Category China News Round-up, Weekly
The rapid growth of mobile payments in China has brought about a decline in bank self-service terminals including automatic, video and smart teller machines, initiating industry transformation. As of the end of 2018, the number of ATMs at banks nationwide dropped by 17,800 quarter-on-quarter to 1.11 million. The average number of ATMs per 10,000 people also fell 1.6% from the previous quarter to 7.99, said the latest report on the overall operation of payment systems by the People’s Bank of China (PBOC), the central bank. The decrease in ATM numbers triggered a decline in the performance of several companies principally engaged in the manufacturing, distribution and operation of such devices.
Beijing ATMVI Technology Co, a designer and manufacturer of kiosks, enclosures and housing for ATMs, disclosed preliminary earnings estimates on February 28, announcing that it posted a 32.52% decrease in operating income year-on-year in 2018 and a CNY6.99 million net loss attributable to shareholders. “During the reporting period, the deployment of bank self-service terminals, including ATMs, kept slowing down due to the rapid development of mobile payments. It caused a slump in demand for related products and services of the company and a large decline in our business income,” the company said. Guangzhou Kingteller Technology Co, another major ATM manufacturer and operator in China, also posted a 32.77% drop in operating income year-on-year in 2018 and a CNY96.22 million net loss. ATM supplier GRGBanking also stepped up efforts for transformation and upgrading, focussing on biometrics, smart video, smart voice and big data.
Contrary to waning demand for ATMs, mobile payments have been growing fast. Last year, banking institutions handled 60.53 billion mobile payment transactions in China with a total volume of CNY277.39 trillion, increasing by 61% and 37% year-on-year respectively. According to a survey by the Payment and Clearing Association of China last year, 80% of mobile payment users used the service every day. For 43% of the users, the average amount for a single payment was below CNY100. About 96% of the users chose mobile payments because of its convenience, and more than 80% favored the service as they no longer need to carry cash or bank cards. Nearly 46% of users said mobile payments will eventually replace cash, the China Daily reports.
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