The number of ATMs on the mainland is projected to climb to 233,000 units by the end of 2010 from 102,000 last year, according to a report from New York research and advisory firm Celent.

Driving the growth will be the largely cash-based transaction system on the mainland, the low density of bank branches at a time when demand for financial services is accelerating, and the need to deploy ATMs more aggressively beyond the largest metropolitan centres to mid-sized and small cities and suburban regions, said Wenli Yuan, senior analyst and co-author of the Celent report.

The pace of that deployment is expected to be matched by supply from leading ATM manufacturers in the country, including market leader NCR and Diebold from the United States, Germany's Wincor Nixdorf International, mainland firm GRG Banking Equipment, and Japan's Hitachi-Omron Terminal Solutions Corp.

'In addition to regular ATMs, China will witness high growth in innovative technologies, such as biometric ATMs that cater to the large and underbanked rural population,' said Sandeep Hebbar, Celent analyst and co-author of the report.

Already, there were signs of innovation taking place as banks expanded their cash-machine networks, Mr Hebbar said.

China Construction Bank had installed terminals that allow balance checking, security transactions and sale of lottery tickets, and supported Chinese characters.

Some ATMs can transfer money to mobile phones, check several transaction details, allow foreign currency withdrawals and pay mobile phone, utility and television fees.

'Millions of new MasterCard and Visa cards have been issued in China as the market moves to smart cards and EMV [a global smart card and payment system standard] compliance,' said Mike Lee, the chief executive of the ATM Industry Association, an international non-profit association promoting cash-machine usage.

'With a predominant cash culture, Chinese consumers prefer debit cards.'

About 80 per cent of ATMs in the mainland are installed in banks and the rest at off-premise locations such as retail stores, hospitals and hotels.

Compared with some developed countries where more than 50 per cent of cash terminals are set up in public places, the mainland offers a significant opportunity for banks and third-party providers to install and run ATMs to meet consumer demand for advanced self-service banking.

Opportunities offered by next year's Beijing Olympic Games has resulted in a deal between Diebold and Sinopec, the mainland's largest petrochemical company and an official Olympics sponsor, to deploy cash machines in select Sinopec fuel stations in the Beijing metropolitan area from September this year.

Daniel Hu, Diebold managing director for North Asia and China, said Sinopec had almost 30,000 fuel stations across the mainland, providing banks 'an excellent opportunity to leverage off this huge network, increase revenue and expand consumer touch points via high quality, round-the-clock ATM services'.

Those new developments will be a welcome addition, as the total number of branches - about 178,770 as of 2005 - in the mainland's banking network and the number of available ATMs are insufficient to address the needs of a population of 1.31 billion.

The four state-owned commercial banks had a total of about 70,000 branches and 55,000 cash machines as of 2005 - making up 64 per cent of the ATM market, Celent said.

Measured against the mainland population, there were 77 cash machines per million people as of last year. With most of these installed in urban areas, the adjusted ATM density is about 181 machine per million urban citizens last year.