ATM demand declined for the first time in five years due to increase in online payments.

Ahmedabad: The increasing use of digital payment tools like Unified Payment Interface (UPI) has reduced the demand for ATMs. People are now using UPI i.e. online payment for everyday purchases as well as big transactions. The number of ATMs in the country has decreased for the first time in five years.

The government told Parliament on Monday that the number of ATMs has come down to 2,55,078 by the end of September, 2024, from 2,57,940 a year ago. During this period there was a decline of about 1 per cent across the country, but in rural areas the decline was 2.2 per cent. The number of ATMs in rural areas decreased to 54,186. Metros also saw a decline of 1.6 per cent and the number of ATMs fell to 67,224.

Minister of State for Finance Pankaj Chaudhary told in the Lok Sabha that government banks have given many reasons for closing ATMs. These include merger of banks, low usage of ATMs, reduction in business profits and relocation of ATMs. Bankers say the growing trend of digital payments and the emergence of UPI has reduced the use of cash, making it uneconomic and impractical to operate ATMs.

Increasing dominance of UPI

There has been significant growth in digital payments and financial inclusion in the last nine years. The spread of Jan Dhan Yojana, mobile internet and UPI has accelerated this change. UPI transactions have grown 25 times in the last five years. There were 535 crore UPI transactions in the financial year 2018-19, which has increased to 13,113 crore in 2023-24.

In this financial year till September Rs. More than 8566 crore transactions worth Rs 122 lakh crore have been recorded. Consumers are now using UPI for everything from vegetables to auto rides and even expensive purchases. This digital revolution has rapidly shifted India from cash to online payments to Digital India.