UPI Boom Reshapes Banking, ATMs Decline in Ahmedabad
Ahmedabad is witnessing a steady decline in the number of ATMs as the shift towards digital payments accelerates across Gujarat. In a span of one year, from September 2023 to September 2024, Ahmedabad district recorded a drop in ATMs from 2,420 to 2,407. While the overall number of ATMs in Gujarat saw a marginal rise of 1.12%—from 14,358 to 14,519—this increase was concentrated in rural areas, indicating a strategic banking shift. The primary driver behind the decline in urban ATMs is the exponential growth of digital transactions, particularly through Unified Payments Interface (UPI). India’s digital transaction volume skyrocketed from 220 crore in FY 2013-14 to an astonishing 18,592 crore in FY 2023-24, with transaction value surging from ₹952 lakh crore to ₹3,658 lakh crore. Financial experts attribute this trend to the growing convenience of mobile payments, increased internet penetration, and banking consolidations that have led to ATM closures in proximity to one another.
The rapid adoption of digital payments is also altering consumer behaviour, particularly among younger generations. Many users no longer rely on cash for day-to-day transactions. Rishabh Patel, a 21-year-old medical student, expressed how digital payments have completely replaced cash in his daily life. “I don’t remember the last time I carried physical money. I use UPI for everything, from groceries to online shopping,” he said. This sentiment is echoed across urban India, where smartphone accessibility and seamless payment apps have rendered ATMs less relevant. The banking sector is adapting to this change, with an increased focus on strengthening digital payment infrastructure rather than maintaining cash-dispensing machines. Public sector bank mergers have also contributed to a decline in ATM numbers in urban areas, as banks consolidate their physical infrastructure to optimise costs.
However, this rapid digitisation of financial transactions comes with a downside. Gujarat has recorded a staggering rise in banking-related frauds, with reported cases of credit and debit card fraud, as well as internet banking scams, surging by 469% in just one year. Data from the Union Finance Ministry reveals that the state recorded 1,349 such cases in FY 2023-24, compared to only 247 in FY 2022-23. Gujarat now ranks sixth among Indian states in terms of online banking frauds. As digital payments become the norm, the increasing threat of cybercrime underscores the need for stronger cybersecurity measures, consumer awareness campaigns, and regulatory interventions to protect users from financial risks.
From a sustainability perspective, the reduction in ATM usage has both positive and negative implications. On one hand, digital transactions reduce paper usage, carbon footprints from cash logistics, and operational costs associated with physical banking. On the other hand, increased reliance on digital payments heightens energy consumption through data centres, servers, and mobile networks. Urban India’s rapid transition to cashless banking is a testament to its evolving financial ecosystem, but it also presents new challenges in financial inclusion, cybersecurity, and sustainable technology use. As Gujarat leans further into digital finance, balancing innovation with security and accessibility remains a crucial priority.
