Srinagar, Feb 24: Virtual ATMs are rapidly overtaking traditional physical ATM networks in J&K, signalling a major shift in how people access cash across the region. With services now available at more than 6.5 lakh locations across the country, virtual ATMs have gained significant traction in Jammu and Kashmir, where the facility is operational at over 3,500 locations.
A statement issued here said that the initiative aims to improve access to cash withdrawal services, particularly in remote and rural areas, while reducing dependence on physical ATMs and bank branches.
Unlike conventional ATMs, a virtual ATM allows a bank customer to initiate a cash withdrawal request through the bank’s mobile banking application. The request generates a one-time password (OTP), which can be redeemed at a nearby registered merchant, including kirana stores, Common Service Centres and other authorised outlets.
The expansion of virtual ATM services in the region is being driven by collaborations between banks and fintech companies. Chandigarh-based fintech startup Paymart India Pvt Ltd has partnered with various banks, including Jammu and Kashmir Bank, to offer the service with the objective of eliminating the need for customers to visit physical ATMs or bank branches.
Experts attribute the rapid adoption of virtual ATMs to the high maintenance costs associated with traditional ATM infrastructure, limited penetration of physical ATMs in rural and hilly areas, and the steady rise in digital transactions. In contrast, virtual ATMs leverage existing merchant networks and smartphones, enabling quicker and more cost-effective deployment.
The model offers multiple benefits, including increased convenience for users, no requirement to carry physical debit cards, reduced risk of skimming and card-related fraud, and lower operational costs for banks. For residents in far-flung areas of Jammu and Kashmir, the service has also reduced travel time and eased access to cash.
Amit Narang, founder of Paymart India Pvt Ltd, said that the shift reflects a broader global trend in financial services. “Globally the world is moving from hardware to smart phones and Paymart is pioneer in effecting cardless and hardware free transactions in India,” he said.
