Prices of ATMs dip to $7000 as demand soars

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Ransacking the banks’ Automated Teller Machines (ATMs) during mob violence seems to have become order of the day in the country.

But not many of the angry protesters would know that the losses they inflict upon the bank concerned by breaking into pieces each of its imported cash machines run in thousands of dollars.

According to industry sources, the current price of an ATM in the international market stands at $ 7000, at least. “An ATM is priced at $ 7,000 in international market,” Veqar-ul-Islam, President of Touchpoint, told Pakistan Today.

Touchpoint is an exclusive distributor of US’s Diebold Inc in Pakistan which Tuesday signed an agreement with the National Bank of Pakistan (NBP) for the deployment of 250 ATMs at the bank’s specified branches across the country.

As the ever flourishing conventional and Islamic banking industry grows in Pakistan at a rapid pace, the demand for ATMs has increased manifold.

Touchpoint chief Veqar says while the banks have so far installed more than 7,000 ATMs across Pakistan there still is a pressing need for at least 4,000 to 5,000 more such machines.

“The State Bank has, therefore, issued recently a circular asking the banks to ensure that each of their branches have an ATM facility,” he said.

The central bank had counted the total number of bank branches in the country at 10,535 in May last year. While the cash withdrawal machines numbered 6,449 in the said month.

The State Bank, in its Annual Payment System Review for FY14, recorded ATM transactions in the country at 258 million valuing Rs 2.6 trillion. This, the central bank said, showed a growth rate of around 30 per cent in volume and value.

Unlike other commodities, which see their prices go in proportion to their market demand, the prices of ATMs have declined over the years in international market.

“ATMs came in Pakistan in 1993. Then one ATM would cost us around $ 40,000,” recalled Veqar.

This means during the last 21 years the prices of these machines have declined by $ 33,000 or 82.5 per cent.

“Technology! The economy of scale, actually, is the reason behind this decrease (in prices),” President and Chief Executive Officer of NBP Syed Ahmed Iqbal Ashraf told Pakistan Today.

The banker said, initially, the manufacturers were adding technical cost to the product that made these machines expensive. Currently, the NBP has 626 ATMs countrywide with the bank planning to order 750 more such machines by the end of December or in January next year.

Veqar, the distributor of ATMs in Pakistan, cited a global trend that had seen the prices of technology shrinking in recent years. He said the ATMs used in Pakistan were being imported from the United States and other European countries.

The life of an ATM, Veqar said, ranges between five to seven years.