{"id":11695,"date":"2024-07-19T12:49:52","date_gmt":"2024-07-19T07:19:52","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=11695"},"modified":"2024-12-19T13:49:37","modified_gmt":"2024-12-19T08:19:37","slug":"brown-label-atm","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/brown-label-atm\/","title":{"rendered":"What is a Brown Label ATM? Benefits And Examples"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Brown Label ATMs are operated by service providers who lease the ATM hardware, with cash management and connectivity to banking networks handled by a sponsor bank. This model serves as a hybrid between bank-owned and <a href=\"https:\/\/razorpay.com\/learn\/white-label-atm\/\">White Label ATMs<\/a>. Its advantages include improving financial inclusion by offering convenient access to banking services without requiring visits to branches.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This article examines Brown Label ATMs, discussing both their benefits and limitations.<\/span><\/p>\n<p>Related Read: <a href=\"https:\/\/razorpay.com\/learn\/advantages-and-disadvantages-of-atm\/\">What are the Advantages And Disadvantages of ATM<\/a><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e7de9b1231b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e7de9b1231b\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/learn\/brown-label-atm\/#What-is-a-Brown-Label-ATM\" >What is a Brown Label ATM?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/learn\/brown-label-atm\/#Brown-Label-ATM-Example\" >Brown Label ATM Example<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/learn\/brown-label-atm\/#Benefits-of-Brown-Label-ATMs\" >Benefits of Brown Label ATMs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/learn\/brown-label-atm\/#Brown-Label-ATM-Operators-in-India-in-2025\" >Brown Label ATM Operators in India in 2025<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/learn\/brown-label-atm\/#Cost-Sharing-in-Brown-Label-ATMs\" >Cost Sharing in Brown Label ATMs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/learn\/brown-label-atm\/#What-is-the-Difference-Between-a-Brown-Label-ATM-and-a-White-Label-ATM\" >What is the Difference Between a Brown Label ATM and a White Label ATM?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/learn\/brown-label-atm\/#Challenges-and-Limitations-of-Brown-Label-ATMs-BLA\" >Challenges and Limitations of Brown Label ATMs (BLA)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/learn\/brown-label-atm\/#Frequently-Asked-Questions-FAQs\" >Frequently Asked Questions (FAQs)<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What-is-a-Brown-Label-ATM\"><\/span><b>What is a Brown Label ATM?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Brown label ATMs are a type of <a href=\"https:\/\/razorpay.com\/learn\/what-is-atm\/\">Automated Teller Machine<\/a> where a service provider manages the hardware and leasing, while cash management and network connectivity are overseen by a sponsor bank whose branding appears on the ATM.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The service provider maintains and operates the ATM, while the sponsor bank handles cash logistics and connectivity to banking networks. Typically branded with the sponsor bank&#8217;s logo, these ATMs enable banks to expand their ATM networks efficiently without direct infrastructure investments.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Brown-Label-ATM-Example\"><\/span><b>Brown Label ATM Example<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">An example of a brown label ATM setup is when Bank A partners with a service provider, Company B, to oversee the management and operation of ATMs in rural and semi-urban regions. Company B assumes responsibility for leasing the ATM hardware and maintaining it, while Bank A&#8217;s branding is visibly featured on the ATMs. This collaboration allows Bank A to extend its ATM network reach without bearing the full infrastructure costs, leveraging Company B&#8217;s expertise in ATM operations and maintenance.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Benefits-of-Brown-Label-ATMs\"><\/span><b>Benefits of Brown Label ATMs<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Capital Expenditure Relief<\/b><span style=\"font-weight: 400;\">: Banks benefit under the BLA model by avoiding upfront investments in ATM hardware and maintenance, which are managed by the service provider.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cost Efficiency<\/b><span style=\"font-weight: 400;\">: For smaller banks with limited national reach, it becomes more economical to pay transaction fees to service providers rather than purchasing and maintaining their ATMs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Incentive for Efficiency<\/b><span style=\"font-weight: 400;\">: The fee structure based on transactions encourages efficient use of ATMs, ensuring optimal deployment and operation across various locations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Enhanced Accessibility<\/b><span style=\"font-weight: 400;\">: This approach enables banks to strategically expand ATM services into rural, semi-urban, and underserved areas, promoting financial inclusion without extensive branch infrastructure investments.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Operational Advantage<\/b><span style=\"font-weight: 400;\">: Banks can focus on core banking functions while leveraging the service provider&#8217;s expertise in ATM management and operational support.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Brown-Label-ATM-Operators-in-India-in-2025\"><\/span><b>Brown Label ATM Operators in India in 2025<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<table>\n<tbody>\n<tr>\n<td><span style=\"font-weight: 400;\">FIS (Fidelity Information Services)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">TSI (Transaction Solutions International)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">TCBIL (Tata Communications Payment Solutions Limited)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Diebold<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">AGS (Automated Global Services)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Prizm<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">FSS (Financial Software and Systems)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Euronet<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Cost-Sharing-in-Brown-Label-ATMs\"><\/span><b>Cost Sharing in Brown Label ATMs<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In the case of a BLA, the ATM operator shoulders the initial financial burden, acting as the upfront investor. Banks then compensate them through a transaction-based system or a fixed monthly payment. This reimbursement covers the essential services provided by the operator, which include managing the ATM&#8217;s cash supply, overseeing its network connection, ensuring its security, and handling any necessary maintenance.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are key insights from the &#8220;India ATM Market Outlook to 2026&#8221; report by Ken Research, published in August 2021, to provide clarity:<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Parameter<\/b><\/td>\n<td><b>INR<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Cost per transaction<\/span><\/td>\n<td><span style=\"font-weight: 400;\">7.7<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Revenue per transaction<\/span><\/td>\n<td><span style=\"font-weight: 400;\">11.0<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Profit per transaction<\/span><\/td>\n<td><span style=\"font-weight: 400;\">3.3<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Number of transactions for break-even per day<\/span><\/td>\n<td><span style=\"font-weight: 400;\">70<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Coverage of investment after years<\/span><\/td>\n<td><span style=\"font-weight: 400;\">3.8<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What-is-the-Difference-Between-a-Brown-Label-ATM-and-a-White-Label-ATM\"><\/span><b>What is the Difference Between a Brown Label ATM and a White Label ATM?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<table>\n<tbody>\n<tr>\n<td><b>Brown Label ATM<\/b><\/td>\n<td><b>White Label ATM<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Operated by outsourcing firms under contracts with specific banks<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Owned and operated by non-banking entities<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Displays the logo or name of the sponsoring bank on the machines<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Does not display any bank logos or branding on the machines<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">The hardware and machines are leased by service providers<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Require licenses and permissions from the RBI to operate<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">The RBI is not directly involved in the regulation of these ATMs, as they operate under bank contracts<\/span><\/td>\n<td><span style=\"font-weight: 400;\">RBI is directly involved in regulating and overseeing these ATMs<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">No compulsion to open Brown Label ATMs in any location<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Compulsory to open ATMs in specific areas<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Challenges-and-Limitations-of-Brown-Label-ATMs-BLA\"><\/span><b>Challenges and Limitations of Brown Label ATMs (BLA)<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Changing Consumer Behavior<\/b><span style=\"font-weight: 400;\">: The increasing preference for digital and cashless transactions reduces the demand for traditional ATM services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Competitive Landscape<\/b><span style=\"font-weight: 400;\">: Intense competition from both bank-operated and white-label ATMs affects market share and profitability for Brown Label ATM operators.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Technological Challenges<\/b><span style=\"font-weight: 400;\">: Keeping up with rapid technological advancements and ensuring seamless integration with banking networks can be challenging for service providers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Regulatory Constraints<\/b><span style=\"font-weight: 400;\">: Compliance with strict regulatory requirements can be complex and costly, impacting the deployment and operation of Brown Label ATMs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Security Concerns<\/b><span style=\"font-weight: 400;\">: Cash transactions at ATMs are vulnerable to security threats, including theft and fraud, necessitating robust security measures.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Frequently-Asked-Questions-FAQs\"><\/span>Frequently Asked Questions (FAQs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><b>1. Who operates Brown Label ATMs?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Brown Label ATMs are operated by service providers who handle the leasing and maintenance of the ATM hardware, while cash management and connectivity to banking networks are managed by a sponsor bank.<\/span><\/p>\n<h3><b>2. Can I use my bank&#8217;s debit card at a Brown Label ATM?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes, you can use your bank&#8217;s debit card at a Brown Label ATM. These ATMs accept debit cards issued by any bank, allowing customers to access their banking services seamlessly.<\/span><\/p>\n<h3><b>3. What is the primary advantage of Brown Label ATMs?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The primary advantage of Brown Label ATMs is that they allow banks to expand their ATM networks without significant upfront investment in infrastructure. This model promotes financial inclusion by making banking services accessible in underserved areas.<\/span><\/p>\n<h3><b>4. Are there any fees associated with using a Brown Label ATM?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes, there are fees associated with using a Brown Label ATM. Banks typically pay transaction fees to service providers, which may be passed on to customers for using the ATM.<\/span><\/p>\n<h3><b>5. What are the services\/facilities available at BLAs?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The services and facilities available at Brown Label ATMs include cash withdrawals, balance inquiries, mini statements, and PIN change services. Additionally, these ATMs often support bill payments, mobile recharges, and other value-added services.\u00a0<\/span><\/p>\n<h3><b>6. How do Brown Label ATMs benefit banks?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">White Label ATMs benefit banks by allowing them to reduce operational costs associated with maintaining a large branch network, as these ATMs provide banking services without requiring banks to manage physical locations directly. Additionally, they help enhance financial inclusion by extending banking services to rural and semi-urban areas.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Brown Label ATMs are operated by service providers who lease the ATM hardware, with cash management and connectivity to banking networks handled by a sponsor bank. This model serves as a hybrid between bank-owned and White Label ATMs. Its advantages include improving financial inclusion by offering convenient access to banking services without requiring visits to<\/p>\n","protected":false},"author":151156506,"featured_media":13675,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1387],"tags":[1926],"class_list":{"0":"post-11695","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-payments","8":"tag-atm"},"_links":{"self":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/11695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/users\/151156506"}],"replies":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/comments?post=11695"}],"version-history":[{"count":4,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/11695\/revisions"}],"predecessor-version":[{"id":15016,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/11695\/revisions\/15016"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media\/13675"}],"wp:attachment":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media?parent=11695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/categories?post=11695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/tags?post=11695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}