Of the 17,350 ATM contracts currently in the request-for-proposal (RFP) stage across banks, about 7,800 are structured around fixed payment models, underscoring the industry’s pivot towards cost stability and long-term service alignment.
“Most of the contracts now being awarded are on fixed-price models, as banks have realised that if they want assured quality, consistency, and clearly defined outcomes from their partners, a fixed-fee structure works far better than a transaction-linked arrangement,” said Anush Raghavan, chief business officer at cash management company CMS Info Systems. “Fixed-price contracts provide greater certainty of service standards and performance outcomes.”
“ATMs and recyclers also have significant potential to migrate routine transaction banking activities away from branches to self-service channels, improving efficiency and customer convenience,” said Raghavan.
Under the earlier transaction-linked model, banks paid vendors based on the number of transactions processed, which made costs volatile and directly tied to usage patterns. While this worked in high-growth phases, it created unpredictability in operating expenses, especially as digital payments altered cash usage trends, making transaction volumes uneven across markets.
The fixed-fee structure, by contrast, allows banks to better forecast expenses, insulate themselves from transaction volatility and negotiate comprehensive service-level agreements (SLAs). These contracts are typically longer-term and integrated in nature, covering cash management, maintenance, monitoring and uptime commitments under a single framework.
Bankers say the move also strengthens accountability. With payments delinked from transaction volumes, vendors are incentivised to focus on uptime, preventive maintenance, and service quality rather than merely processing higher volumes.”Under fixed-price models, banks benefit from clear budget visibility, stronger uptime and lower operational risk, as integrated cash management partners take end-to-end responsibility for maintenance, cash availability and technology upgrades,” said a banker. “In contrast, transaction-based contracts, while flexible and cost-efficient during low-usage periods, often lead to unpredictable monthly costs and weaker incentives for sustained uptime.”
Integrated service providers operating under fixed contracts are expected to deliver higher ATM availability, improved turnaround times, and better customer experience, particularly in semi-urban and rural markets where service reliability is critical.
ET recently reported that over the next six months through the first quarter of FY27, banks have floated requests for proposals (RFPs) for nearly 17,350 ATMs, with Union Bank of India, Bank of India, Canara Bank, and Indian Bank together accounting for more than 8,000 machines.
Of the total RFPs floated, around 13,100 are for cash recyclers, indicating a strong preference for recycler-led deployments, which account for more than 75% of the planned installations.
Union Bank of India plans to deploy around 2,000 machines, Bank of India about 3,700, Canara Bank nearly 1,500, and Indian Bank roughly 1,006.