Friday fun: What happens when a very tall tow-behind encounters a not-so-tall awning over a drive-through ATM? One of them loses. And it being a drive-through, it was all caught on video.
Archive for September 2009
It’s all in the interface
Wednesday, September 16th, 2009
An ATM’s hardware gets a lot of attention, and rightly so — if the moving parts don’t work, the ATM may have trouble dispensing money. And if it’s not well-built, it could be easily damaged or stolen.
But it’s the software that tends to determine whether an ATM experience is painless or tedious. A well-designed user interface lets customers do their business quickly, easily and hassle-free, with fewer frustrating mistakes. A poorly designed interface may cause customers to go elsewhere.
Important as it is, most people don’t think about the interface unless it performs really, really badly. But the interface doesn’t just pop out of nowhere. Someone had to plan out how the machine would work, and then program those steps into the software.
A blog called Physical Interface offers an interesting behind-the-scenes glimpse of how one ATM interface was designed — in this case, for Wells Fargo ATMs.
The designer was part of a team approached by Wells Fargo to redesign the interface for touch screens. That presented challenges but also opportunities.
Old menu, left; new menu, right.
Above are the before (left) and after screenshots of the main menu page. Because it’s a touch screen, menu items no longer had to be associated with a button on the side of the screen. That let the interface use the entire screen, and eliminated the “need” for clunky, distracting filler visuals.
The buttons are bigger but the graphics are played down (transparent backgrounds, no borders). The result is more attractive, restful and easy to read: You don’t have to hunt through a busy visual landscape to find the function you want. Color coding lends further structure to the buttons.
There’s a lot more at the link. The designers had to consider how people use machines and the different models of ATMs owned by Wells Fargo. They designed a high contrast color palette so the screen would be legible in both semi-darkness and direct sunlight.
All in all it took the design team a year to develop the design, and another six months for Wells Fargo to begin installing it on their machines.
Expanding ATM usage in a credit crunch
Monday, September 14th, 2009
Investing in new technology during a recession might seem counterintuitive. Isn’t this a time to hunker down and wait for the storm to pass?
Well, that’s one way to look at it. It’s little more than a survival strategy that accepts reduced sales as the new status quo, but if the recession doesn’t last too long it’ll see you through.
But there’s another way to look at it. Recessions change consumer spending habits, and successful stores figure out how to adapt to those changing habits. Doing so gives you the chance to not just survive the recession, but thrive during it.
In the current recession, for example, access to credit has been sharply curtailed. Whether because of bankruptcy, changes in eligibility rules by lenders or a desire to avoid the temptation of credit-card debt, many consumers either won’t or can’t use credit cards like they once did.
Meanwhile, merchants are even more wary of bad checks, credit-card fraud and high credit-card processing fees.
Put it all together, and it means that merchants who go out of their way to be cash-friendly are likely to see increased sales and fewer fraud-related headaches.
Those are some of the conclusions of a market analysis that draws on interviews with bankers, industry figures and Tremont Capital Group, a strategic consulting and acquisition firm based in Boston.
“Green is the new platinum. Cash-dispensing ATM transaction volume will benefit from the credit squeeze in the current economy,” said Sam Ditzion, CEO of Boston-based Tremont Capital Group, a strategic consulting and acquisition advisory firm that specializes in the ATM industry. “In addition, recent historically low interest rates and normalized fuel prices have made vault cash and armored services less expensive, which help increase profits for ATM operators.”
Cash is the most dominant payment method in the United States, and it’s expected to retain its popularity. “The deterioration of consumer credit has transformed cash into a tangible and stable form of payment that people always can rely upon,” said Ditzion.
And it’s never been more affordable to own an ATM:
Previously, many locations could not support an ATM through transaction volume because of the price of a retail ATM. However, as the prices for retail ATMs dropped from the $10,000 range in the mid-1990s to the cur-
rent level of between $2,500 and $3,500, more locations can afford an ATM.
If your goal in this recession is not just to survive, but to thrive, installing an ATM could be one of the smartest investments you make.
How ATMs work
Monday, September 14th, 2009
The inside of an ATM.
ATMs perform some pretty sophisticated functions — encrypted confirmation of account balances and access privileges, followed by handing out cash. But at heart they’re fairly simple machines: a computer, a card reader, a safe, and a cash dispenser. The complexity lies mostly in the software and physical security.
If you’ve ever wanted to see what lies inside an ATMs armored case, this “How Stuff Works” video takes you there. The machine they show is a big “through the wall” bank ATM. But non-bank ATMs work similarly — they’re just smaller, hold less cash, and typically open from the front rather than the back.
After watching the video, flip through the other pages in the article. Page 3 describes how ATMs contact the processing network. Page 4 walks you through the parts of the ATM interface.
What most people don’t think about is, “how does the machine make sure it dispenses the right amount of money?” The answer is severalfold: programming that tells the ATM what denominations are in which dispensers, a sensitive bill-mover that makes sure only one bill is dispensed at a time, and an electronic eye that counts the bills as they are dispensed.
Finally, how does the ATM owner get reimbursed for the cash you take out of their machine? Through electronic fund transfers between your bank and theirs.
As you can see, there’s a lot that goes on behind the scenes just so you can have access to cash whenever you need it.
ATM users spend 65% more in convenience stores
Friday, September 11th, 2009
One of the benefits of having an ATM in your store — besides surcharge income, reduced credit-card fees and increased customer traffic — is increased sales. That’s because ATM users tend to spend more in your store than customers who don’t use the ATM.
The big question, of course, is “how much more?”
At ATM Network, we try to be conservative with our estimates. So in conversations and in our online profit calculator, we use 20% — as in, “ATM users spend 20% more in your store than non-ATM users.”
But a new study out of England suggests that the sales boost from installing an ATM could be much, much higher.
According to research conducted by HIM, a
European research firm, convenience-store retailers who install ATMs see an average
spending increase of 65 percent soon after the machines are installed.The survey, conducted during spring 2006, was carried out as part of Link Interchange
Network Ltd.’s Convenience Store Tracking Programme, which is carried out several
times a year.
That first paragraph is a little confusing: do they mean overall, or ATM users vs. those who don’t use the ATM? Turns out, it’s the latter:
According to the survey’s findings, c-store shoppers spend an average of £5.64 per visit;
a cash machine user at the store will spend 65 percent more, an average of £8.99.
Translated into dollars, the average convenience-store customer spends $9.40 per visit, while an ATM users spends $15.
And speaking of customer traffic:
The research also found that the removal of a cash machine could have a
detrimental effect on business, as one in 10 people stated they would shop elsewhere if an
ATM was removed from their local c-store.Cash machines also had a positive impact on footfall numbers as it was found that the
cash machine attracts more customer visits to a store than, for example, the sale of
magazines or sandwiches.
The study also noted that two-thirds of consumers expect to find ATMs in convenience stores, and are disappointed when one isn’t there.
Garbage in, garbage out
Friday, September 11th, 2009
Not. Tall. Enough.
Friday fun: The above picture demonstrates that no matter how many features an ATM has, you still have to use it wisely if you want to get your money’s worth out of it.
The image is supposedly an actual ATM at a Melli Bank branch in Iran.
Retailers rebel against credit-card fees
Wednesday, September 9th, 2009
Most people probably assume that when they buy something with a credit card, some of the money goes to the credit-card company.
What they might not realize, though, is that the charge isn’t a simple percentage of the purchase price. It’s a complicated mixture of percentages, monthly fees and per-transaction fees called “swipe fees”.
That last has long been a sticking point for retailers. If a purchase is small — and some people use credit cards to buy $1 candy bars — the fee either wipes out any profit on the sale or even forces the retailer to take a loss.
Now retailers are fighting back.
The association is among a coalition of retail associations, trade groups and small businesses nationwide that have joined forces to fight the fees.
Indianapolis Circle K stores announced Wednesday they are joining the company’s 3,000 stores in asking customers to sign a petition that asks Congress to rein in the fees and change rules on how they are set.
Legislative action is the only feasible way to change the fees, because otherwise it’s a battle between small retailers and giant credit-card companies. The credit-card industry says all the fees are negotiable, but in practice they have no incentive or reason to negotiate with small retailers — it’s a classic case of the retailer being dependent on the credit-card provider, and having next to no bargaining power.
Circle K, for instance, has 3,000 stores nationwide — not exactly tiny — and still hasn’t had any luck negotiating on the fees.
Scott Reed, Circle K’s director of marketing for the Midwest (said) “These (fees) are nonnegotiable, yet they are our third-largest cost in doing business, only past labor and rent.”
Circle K isn’t alone:
For gas stations and convenience stores, what they pay in fees in some cases approach what a store makes in pretax profits.
That adds up to big money: About $48 billion in “swipe fees” each year.
While retailers pursue legislative action, there’s a more immediate way to avoid or reduce credit-card fees: Install an ATM.
ATMs accept all major credit cards, but without any of the fees. So instead of accepting credit cards for small purchases, retailers can direct customers to the ATM. By avoiding fees and charging a surcharge, a merchant turns a transaction expense into a profit center.
This works especially well in the current economy, where people have begun using cash as a budgeting method. They don’t want to get lulled into carrying credit-card debt, so they use cash whenever possible. Stores with ATMs are more attractive to such customers — and cash-based customers are the best kind of customer to have, since they carry no fees and no worry about fraud or bad checks.
This isn’t just theory: ATM Network customers report that their credit-card fees drop an average of 30 percent or so after they install an ATM (it also virtually eliminates bad-check charges).
Yet another way to reduce credit-card fees is to have your processing done by a low-cost company. Card Network Services (CNS) is an ATM Network subsidiary that handles point-of-sale credit-card processing. CNS prides itself on having the lowest fees in the business, along with outstanding customer service. Check them out and compare them to the competition.
That three-pronged approach — legislative relief, ATMs, and low-cost processing — are the best way for retailers to control their credit-card costs.
Graphics increase ATM allure
Tuesday, September 8th, 2009
ATMs are compact technological marvels, but they all have one drawback: they tend to be nondescript. In most cases, they’re beige or black or gray. In some cases, they were clearly designed for functionality, not looks.
Basic marketing tells you that making something more eye-catching and appealing increases usage. Especially something like an ATM, where getting customers to trust it with their bank card is part of the sales process.
That’s why ATM Network offers complete graphic services for the ATMs we sell. We can paint it or wrap it in any design or color you want for just a few hundred dollars.
Still, you might be wondering if it really works. The answer is yes.
In the off-premise market, placement of a machine within a location can mean the difference between profit or failure. A tired-looking machine might be relegated to the far corner of a convenience store, leaving many potential users unaware of its presence. And a machine adorned with only the required notices can leave consumers feeling wary.
High-quality visual branding helps overcome consumer distrust of generic-looking ATMs tucked away in the corner of a convenience store.
Well, okay. That’s the pitch, and it’s classic marketing logic. But we ask again: does it work?
Steve Burns, director of operations for E-Cash Inc., an Indiana-based ISO, said that a store manager is more likely to place a branded ATM in a prominent place. “When you’re competing with sunglasses and potato chips, when you put the store name on the ATM, all of the sudden you have a nice spot near the front door,” he said.
So it gets merchants to display machines better. But does it increase customer usage?
Branding pulls in users. For a group of five bank ATMs in January 2007, the total transactions totaled 928. The five machines then were upgraded with the bank’s brand on the front and at least one side of each machine. In January 2008, the same five machines in the same locations completed 1,487 transactions — a 60 percent increase.
Of course, every location is different: whether wrapping or painting is worth the money depends on the traffic at an individual site. But let’s do the math on the example above.
- Take the monthly transaction numbers (928 before, 1,487 after) and divide them by five (because there were five ATMs). That gives you 185 transactions per month per machine before wrapping, and 297 transactions per month afterward.
- Assume a $300 wrap job per machine and a typical $2 surcharge.
- Each machine generated $224 more revenue per month after wrapping.
- That means the wrapping paid for itself in about six weeks through surcharge revenue alone — never mind the profits generated by increased customer traffic.
Even if you assume more modest numbers — 100 transactions a month, increasing to 140 after wrapping — the wrap still pays for itself in under four months.
That’s a cost-effective way to boost revenue without sacrificing additional retail space.
Now that’s secure
Tuesday, September 8th, 2009
If you ever wondered how hard it is to break into modern ATMs, the answer is very hard.
A firefighter cut into a hefty steel door to free a security guard who got trapped while filling up an ATM yesterday.
They took nearly five hours to rescue the man. At one point rescuers shoved a straw through the hole to give him a drink of juice.
The guard got trapped when the security door slammed shut on him after he went into the vault to stock up the machine at a Tesco store in Manor Park, East London.
The guard managed to call 999, the British version of 911, so help arrived pretty quickly. But it took firefighters five hours to break into the ATM using heavy cutting gear.
That’s pretty secure.
Surcharges built U.S. ATM industry
Friday, September 4th, 2009
Why are ATMs everywhere in the United States and extremely scarce in India?
In a word, surcharges.
There are other factors, of course. ATMs have been in use in the United States far longer, for one thing. But surcharges help explain why there are just 40,000 ATMs in India (a country of 1.15 billion people), while America’s 305 million people have access to 395,000 ATMs.
That’s the conclusion of a recent article in India’s Economic Times.
In India, government regulations mostly prevent banks from imposing surcharges on non-customers, and the surcharges they do allow are tiny: about 10 cents per transaction. Indian transaction networks do pay ATM owners a small usage fee on each transaction, but it’s not a significant money-maker.
That means there’s no financial incentive for banks to greatly expand their networks, and absolutely no opening for non-bank ATMs — the kind you find in convenience stores, gas stations and restaurants.
The early history of ATMs in the United States was similar.
In the U.S., ATMs were first deployed in proprietary networks by banks, usable only by that bank’s customers. As in India, the banks eventually developed regional and nationwide transaction networks to expand the number of machines their customers could use. As in India, the network paid each bank a small usage fee each time someone used that bank’s ATMs.
In India the government bans surcharges. In the United States, there was no government regulation. Instead it was the processing networks that banned surcharges, because they made money based on the number of transactions, and they feared surcharges would cut ATM usage. So ATMs remained limited in number, generally attached to bank branches.
But by the 1990s, two forces were leading a campaign in favor of surcharges: Banks with large numbers of ATMs (who were essentially subsidizing smaller banks by providing free access to their machines), and independent operators that wanted to put ATMs in non-bank locations. They carried the day, and the processing networks dropped their prohibitions against surcharging.
The decision caused a certain amount of uproar, and led to proposals in Congress to ban surcharges. But they went nowhere. The only thing regulators require is that surcharges be prominently displayed, and users given the option of canceling a transaction rather than pay a surcharge.
And good thing. Because over the next 10 years, the number of ATMs in the United States soared from 150,000 to 395,000. An entire industry of non-bank ATMs — smaller and cheaper than their expensive bank cousins — has sprung up, adding competition and innovation to the mix. Further, proprietary networks are a thing of the past: nearly all ATMs accept all cards, regardless of issuer. The result is unparalleled convenience for consumers, where banking is something you can do any time, anywhere. People recognize that the surcharge is a convenience fee, and are willing to pay it when convenience is important to them.
So take a moment to appreciate the lowly surcharge, the fee that built an industry and changed the face of American banking.
