China overtakes Japan as world's second largest ATM market

China overtakes Japan as world's second largest ATM market

China has overtaken Japan to become the world's second biggest market for ATMs, with over 200,000 machines scattered around the country, according to a report from Retail Banking Research (RBR).

By the end of 2009 there were around 208,000 ATMs in China, 42,000 more than 12 months earlier and 113,000 more than in 2005.

This saw the country overtake Japan to become the world's second largest ATM market, behind the USA, breaking a run that has lasted since 1972 - thirteen years before China installed its first machine.

Despite the rapid rise in ATM numbers, RBR says the ratio of machines to people and branches is still relatively low, leaving plenty of scope for further growth.

The firm says the growth is in part due to a transformation of the bank branch in China from a mere transaction point to a service outlet, stepping up the pressure to migrate basic transactions to self-service.

The country's 'big four' state-owned banks account for a large proportion of ATMs but RBR says another sector of the market has gained in significance in recent years: ATM Outsourcing Service Providers (AOSPs).

ATM deployment and operation are subject to strict governmental regulation in China, and non-banks are not allowed to deploy terminals without a financial institution's involvement and branding.

To address these requirements a "co-operative deployment model" has evolved where banks outsource ATM deployment to AOSPs, and pay them a service fee and a share of transaction income. This segment has grown relatively recently, but already accounts for nearly 10% of the ATMs in the country.

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