20/12/2006 - Business news Americas
Research: Excessive fraud at ATMs threatens to stunt growth - Regional
Por: Tony Danby
Brazil's ATM industry is at risk of suffering shrinking growth rates because of the excessive amount of fraud involving such machines, according to Aravindh Vanchesan, an analyst at US consultancy Frost & Sullivan.
Banks are hesitant to invest heavily in the technology because of the fraud rate, Vanchesan told BNamericas in an email.
Such crime is a global phenomenon but more acute in Brazil, which stands out from other countries because of the popularity of ATMs and the range of services they offer customers, Vanchesan said.
The traditional magnetic-strip bank cards are particularly prone to fraud, especially in countries such as Brazil, Mexico and Thailand, he added.
A strong barrier to ATM growth is the absence of a robust IT infrastructure and the need to invest in it in Brazil. But the majority of banks and financial institutions in the country have budgetary restrictions, he noted.
The market for ATMs generated US$2.21bn worldwide in 2005 and is expected to reach US$2.88bn in 2010, according to Frost & Sullivan.
China, Brazil and India have been identified as the markets with the most potential for growth by the ATM industry, but Vanchesan could not give a breakdown of the figures.
In contrast, the US ATM market is undergoing healthy growth despite being close to saturation point, mainly because of the Check 21 federal law designed to enable banks to handle more checks electronically, according to Vanchesan.
Brazil however has a lot of potential sites left where an ATM can be installed, he said.