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Mar. 23 (NBD) -- Chinese companies conducting business related to automated teller machine (ATM) saw striking decline in revenue and net profits last year due to wide acceptance of mobile payment.

The ATM producer ATM VI Professional released its full-year pre-announcement of 2017 early this month, the net profit attributable to shareholders of the company is estimated at 3 million to 3.9 million yuan (474,143 to 616,386 U.S. dollars), presenting a sharp decline of 88.57 to 91.21 percent year on year. According to the announcement, the company ascribed the lackluster performance to the rapid development of Alipay and Wechat payment in 2017. As a large amount of small cash payment has been replaced by mobile payment, the distribution of automatic equipment including ATM was seriously affected, the announcement said.

Liu Gang, founder of the payment industry data provider paynews.net, noted that the mobile payment takes the place of cash payment. Functions such as cash withdrawal and money transfer that ATMs provide can be easily completed at home through smartphone now.

Another ATM manufacturer NDT Science and Technology also mentioned in its announcement that the company is predicted to suffer loss in 2017. 

With the fast growth of mobile payment, the financial automatic equipment market saw slump in demands which intensified competition in the industry, sending the equipment prices and gross profits lower.

KingTeller engaging in ATM product sales and ATM cooperative operation service predicted that its revenue and profits would reduce 27.27 and 31.21 percent year on year respectively, with the net profit attributable to shareholders of the listed company down 36.73 percent year on year. 

Wang Pengbo, an analyst of the big data research company Analysys, said mobile payment is convenient and can cover abundant scenarios, but the ATM still has demands under conditions with no network or electricity though the demands is in a slump.

The mobile payment business maintained fast growth last year. According to a report published by Central Bank of China, digital payment businesses processed by financial institutions in bank industry totaled 152.58 billion, amounting to 2,419.2 trillion yuan (382 trillion U.S. dollars), with 2,075.09 trillion yuan (328 trillion U.S. dollars) for online payment business and 202.93 trillion yuan (32 trillion U.S. dollars) for mobile payment.

As mobility is becoming more common and making payment by scanning code has been approved and regulated by the authority, with mature biometric technology to be increasingly varied and mature, the mobile payment is expected to further expand in the future, especially in the offline small amount retail field, a research report from Orient Securities said.

The expansion of mobile payment makes the number of ATMs plunge in recent years. The data showed that as of the end of 2016, ATMs connecting to the national network climbed to 924,200 units, increasing 57,500 units compared to the end of 2015, up 6.63 percent year on year. From 2011 to 2013, the number of ATMs totaled 333,800 units (2011), 415,600 units (2012) and 520,000 units (2013), which indicated the slowing growth rate year by year.

With regard to the question whether ATMs will be replaced by mobile payment, Liu pointed out that those undeveloped regions in China still rely on cash trade, but simple ATMs will decrease dramatically. ATMs will transform into intelligent machines such as video teller machine or interactive trading mode, added Liu.

It is noted that despite the winter of the ATM industry, some ATM-related enterprises still gain profits in 2017. The Guangdong-based company GRG Banking announced 6.68 percent rise for net profit attributable to shareholders of the company. GRG Banking explained that while enhancing the transformation of new-generation ATM products, it also explores new technology including blockchain and artificial intelligence.

Email: zhanglingxiao@nbd.com.cn