UPI Reduces Cash Dependency: 4,000 ATMs Closed in India Amid Digital Payment Surge

India's digital economy is rapidly taking shape. A strong network of infrastructure required for this has been established across the country, leading to a significant rise in UPI (Unified Payments Interface) transactions. With the ability to make even small payments through mobile phones, people have started carrying less cash. As a result, the number of ATMs has seen a decline.

Data released by the Reserve Bank of India shows a decrease in the number of ATMs across the country. According to this data, as of September 2023, there were around 219,000 ATMs in the country. Over the year, this number has reduced to 215,000 by September 2024. In addition, ATMs in urban areas with lower customer footfall have either been shut down or relocated. This underscores the decreased use of ATMs due to the rising popularity of UPI.

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Impact of RBI's Imposed Restrictions

In the fiscal year 2022, 89% of transactions were made in cash. After the COVID-19 pandemic, the government adopted policies to encourage a low-cash and digital economy.

The RBI has also increased the fees for ATM usage, including charges for using other banks' ATMs, and placed limits on free transactions, which has further reduced ATM usage.

Closure of Off-Site ATMs

Mainly, the reduction has been seen in off-site ATMs, which are located away from populated areas. In September 2023, the number of off-site ATMs was 97,072, which decreased to 87,638 over the year. Due to a drop in customer footfall, many of these ATMs have been shut down.