By Steve Whelan
http://www.cgap.org/docs/IT_atm.pdf
Abstract
Provides a basic overview of how ATM's work and how they are used by microfinance organizations. It describes the basics of ATM technology and the services it provides plus it explore the experiences of Prodem in Bolivia, Ademi in Dominican Republic and MEB in Kosovo and draws basic conclusions about using ATMs for microfinance operations. At the end of the document, the author provides the names of technology suppliers and operators as a reference for those MFIs that are thinking of using this technology.
The main takeaways of this document are:
ATM's conduct many transactions that otherwise would be performed by staff. Freeing staff from these duties allows them to focus on personalized services.
ATM's are better for MFIs that provide savings and want to serve on multiple locations during non-business hours.
ATMs are expensive (around US35,000) and require specific needs: reliable electric and communications connections, affordable dial-up or leased lines to send and receive data, reliable after-sales servicing, systems to securely transfer cash to the machines, etc. Thus it is important to study the options in the market and choose the technology provider or partner (with an existing ATM network) that allow for efficient operations.
Another key decision point is to chose between magnetic strip cards with Personal Identification Numbers (PINs) and smart cards, which can use fingerprint validation. One advantage of smart cards is that they do not require real-time internet connection.
Summary
The author looks at the experiences of three MFIs who have introduced ATMs to their operations, using different technologies and different strategies that met the specific demands of their clients and their organizations.
Two main benefits are highlighted from these experiences:
Greater convenience for customers and increased deposit mobilization.
Freer staff to handle more personalized customer interactions, rather than routine deposit taking and balance-checking.
Lessons learnt are:
It is important to find a technology provider that is committed to the MFIs market;
Leverage existing resources (i.e. partner with an existing ATM network and operating company to avoid full capital investments);
Test with a pilot to assess feasibility of the technology, client adoption and adequacy of physical infrastructure.
Other issues to be considered before engaging in the use of these technology are: security issues for ATMs, administration of cards and PINs and cash delivery; maintenance of hardware, software and communication systems.