Archive for the ‘ATM benefits’ Category

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.

Posted in ATM benefits, ATM owners, Research | 1 Comment »

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.

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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.

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ATMs boost sales for flea market

Wednesday, August 19th, 2009

A recent case study by Triton Systems highlights how an ATM can boost sales for local merchants.

The Waldo, Fla., Farmers and Flea Market bills itself as north central Florida’s largest flea market, with 1,000 booths covering 50 acres that attract 35,000 visitors per weekend.

Most of the booths are run by part-time merchants that don’t accept credit cards. Many of them don’t even take checks. So making it easy for customers to have cash on hand is crucial to the market’s success.

Steve Blakewood, the market’s owner, makes that happen with two ATM machines. The machines are kept very busy, typically dispensing $25,000 per weekend.

Blakewood notes that the machines boost sales in several ways.

“It’s a real convenience for our dealers because the customer can get
cash and go back to the booth,” Blakewood said. “A lot of people don’t
intend to spend money but they end up seeing something they want, and
come back two or three times to the machine.”

Merchants use the machine, too, often paying their booth-rental fees in cash. Blakewood sets the transaction fee at a relatively low $2.00, both as a convenience and to encourage repeat use.

It seems to be working.

Blakewood estimates that about 50 percent of the money flows to the flea market dealers and the revenue generated by the transaction fees supplements the flea market income. By way of comparison, experts estimate that about 30 percent of the cash withdrawn in a convenience store ATM is spent in the store.

Blakewoods experience demonstrates the three main ways ATMs help merchants: transaction fees, increased sales and avoiding credit-card processing fees.

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ATM software trends, or ‘Hello, Windows’

Friday, August 14th, 2009

The cover of the 2009 Software Trends report

A few things you might not know about ATMs:

They used to run on IBM’s OS/2 or proprietary platforms.
Newer ATMs have incorporated much more robust operating systems, notably Linux and Windows
Most ATMs on the market today run either Windows CE or the full-fledged Windows XP

That information and more is contained in the 2009 ATM Software Trends survey from KAL, an independent maker of ATM software. While the report is largely aimed at large financial institutions like banks and credit unions, it still contains a lot of information for independent ATM owners.

For instance, why are ATM owners switching to machines that run on modern operating systems? Multiple reasons:

The biggest driver is increased security. A more powerful OS can handle more complex security features like biometrics and remote keys.
Added functionality. With a reasonably powerful computer inside the ATM, owners can offer additional products (such as cash-value cards, digital downloads and mobile-phone minutes) additional on-screen information (such as maps, advertising and web-browsing) and interactive features like transaction personalization. In particular, modern ATMs can display ordinary HTML pages on screen, letting owners design their own interactive screens or easily modify existing ones.
Reliability. Modern systems are both more stable and better-supported than older systems.
Cost control. This mostly applies to companies that own multiple machines. But having an off-the-shelf OS means the ability to use off-the-shelf software instead of expensive proprietary solutions, and the more powerful OS makes it easier to manage multiple machines (or a network of machines) from a central point.
Future compatibility. A modern OS means the ATM can take advantage of as-yet-unseen advances in technology, products and services, extending the useful lifespan of existing machines.

The full report is available as a pdf from the link above, and goes into a lot more detail, as well as breaking trends down by regions of the world.

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ATM uses Google Maps for directions

Wednesday, August 12th, 2009

An ATM in Barcelona, Spain, uses Google Maps to give directions.

With the newer Windows-based ATMs, there are a lot of cool things you can do if you know how. Here’s one example, from Barcelona, Spain:

I was planning on buying some tickets for a concerts using one of these “ServiCaixa” ATM machines of La Caixa. I couldn’t find what I was looking for so I decided to go into the Help (ayuda) section of the machine. There I found the ability to look for closest service centers of La Caixa. As you can see on the picture, this was implemented with the help of Google Maps.

It’s an example of two emerging ATM abilities: Dispensing tickets or coupons as well as cash, and tapping into the Internet to serve up additional functions.

Posted in ATM benefits, ATM operators, Technology | 1 Comment »

Credit-card processing vs. ATMs: Who wins?

Wednesday, May 27th, 2009

If you are not accepting plastic in your business yet, you are missing a huge opportunity to increase your revenue. Many merchants ask us if they should get an ATM machine or just use credit-card processing. Here are the differences so you can decide what would be best for your business.

Credit cards

When accepting credit cards, you have two components: the card reader that you swipe the cards through and the cost of the transaction. Your upfront cost for the card reader is very low. But your long-term costs for processing the credit card can be the hidden killer!

If you do any kind of volume on your credit-card machine, you will pay in several ways:

A percentage of every dollar that is run through your terminal;
A fee per transaction;
A monthly statement fee;
Often there are other fees and charges as well.

The transaction fee is usually tiny unless you have a very low average ticket (like a package of gum); then it can be quite costly.

Automated teller machines

With ATMs you invest more upfront, but it’s usually much more affordable in the long term. You make money on every dollar instead of paying a fee on every dollar.

You can increase your revenue in 4 ways:

Increased spending and customer traffic
Reduced number of bad checks
Elimination of credit card fees
Surcharge revenue (the fee customers pay to withdraw money from your ATM)

Which is better for me?

Given the different cost structures, we recommend an ATM if you have more than 100 customers per day coming through your business. If you have less than that you may want to start with the credit-card machine and either add or switch to an ATM as traffic increases.

You’re an ATM company. Why should I believe you?

We offer both ATMs and credit-card processing, so we’re somewhat neutral on the subject.

Feel free to contact us for a free business evaluation to determine which would be the best option for you, or to find out about our full range of merchant services, including check collection. Call us toll-free at 1-800-929-0228 or fill out a contact form.

Tags: ATM surcharge, ATMs, Credit-card fees
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ATMs are a ‘must have’ for bars and nightclubs

Monday, April 6th, 2009

Nearly 40 years after the first ATM made its debut outside New York City’s Chemical Bank, it seems that cash machines are everywhere. In addition to being on nearly every street corner and convenience store, ATMs often find a home inside bars and nightclubs.

If you ask barowners and managers about ATMs, most will tell you that they couldn’t operate without them.

“I think it is essential for anybody who sells liquor and food to have ATMs,” said Roger Payne, General Manager at Shephard’s Beach Resort in Clearwater, Fla. “It helps people spend money. Some people don’t want to use their check card. They prefer to use debit and get cash out of the machine.”

Many bars and nightclubs don’t accept credit cards on busy nights. On those nights, ATMs typically get a ton of business. According to Cory Huetter, owner of The Safari Bar in Omaha, Neb., “Our bartenders just get way too busy to mess with credit cards. In the time it takes to ring up a credit card they could have poured 50 shots.”

Tim Borden is vice president of corporate development for Ala Carte Entertainment, a Chicago-based restaurant and nightclub company that operates 27 locations. He said having an ATM in your business often determines whether a customer stays or goes elsewhere. “Having an ATM is not a novelty anymore. People almost expect it there. For a decent-size establishment, it’s almost a prerequisite in people’s minds.”

A big advantage of having an ATM inside a bar or nightclub is that much of the money withdrawn ends up getting spent inside the business. “I think a good percentage of the money withdrawn is for the purpose of spending at bars,” Borden said. “You also get a lot of return on additional sales.”

Learn more

To find out more about ATM ownership, leasing or placement, e-mail info@atmnetwork.net, visit our Benefits page or download our Buyer’s Guide.

Tags: ATMs, Bar, Cash machine, Nightclub, Restaurant
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7-11 study measures advantages of ATM ownership

Wednesday, December 31st, 2008

7-11 first installed ATM machines in all of their locations nationwide more than 30 years ago because they learned (maybe before anyone else) that customers that use their ATMs to withdraw cash end up spending money inside the store.

Not only did ATM customers spend money inside the store when they use a cash machine, but they actually spend 25 percent more on average than non-ATM customers. For many types of business owners, this adds up to additional revenue of several hundred dollars every month.

Cash machines have become a very popular tool for personal banking. Nearly 80 percent of all banking is done through privately-owned cash machines in places like gas stations, convenience stores, bars and nightclubs.

People are busy these days, and it makes them impatient. They don’t want to stand in line at a bank just to get cash. So most people get cash while doing other things like shopping or running errands.

As a result, many people make decisions on where to shop based on whether or not there’s an ATM machine inside. Indeed, most customers expect businesses like gas stations, convenience stores, and bars to have cash machines.

Further, a convenience like an ATM increases customer loyalty. Once customers know you have an ATM, it’s much easier to get repeat business from them and have them coming into your business weekly or even several times per week.

For the customers that come into your store just to use the ATM machine and do not end up spending money, you still earn the transaction fee on the machine, which is normally between $2.00 and $3.00.