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.
By the end of 2018, the number of ATMs at banks nationwide dropped 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, stated the latest report on the overall operation of payment systems issued by the People’s Bank of China, 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 Ltd, 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 6.99 million yuan ($1.04 million) net loss attributable to shareholders of the company listed on the National Equities Exchange and Quotations.
“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 Ltd, another major ATM manufacturer and operator in China, also reported a 32.77% drop in operating income year-on-year in 2018 and a 96.22 million yuan net loss attributable to equity holders of the company.
Kingteller tried to make breakthrough on various fronts, such as developing a new generation of smart teller machines and providing banks with comprehensive solutions for front-end systems.
ATM supplier GRGBanking also stepped up efforts for transformation and upgrading. In a disclosure of preliminary earnings estimates for 2018, the company said it deepened the exploration of the application of technologies such as biometrics, smart video, smart voice and big data.
Contrary to waning demand for ATMs, mobile payments have been on an upward trend. Last year, banking institutions handled 60.53 billion mobile payment transactions in China with a total volume of 277.39 trillion yuan, increasing by 61% and 37% year-on-year respectively, the report said.
A survey conducted by the Payment and Clearing Association of China showed that last year, 80% of mobile payment users used this type of service every day. For 43% of the users, the average amount for a single payment was below 100 yuan.
This article originally appeared on the China Economic Net
Published in The Express Tribune, March 22nd, 2019.
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