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Thursday, July 1st, 2010
Back on June 7, RBS WorldPay announced it would be changing its official end-of-day close from 4 p.m. to 3 p.m. in order to accommodate new Mastercard-related procedures.
But here’s some good news: RBS has since determined that the change is unnecessary. So its end-of-day close will stay at 4 p.m.
Tuesday, June 15th, 2010
ATM Network has donated $3,000 to an industry fund that will help educate consumers and legislators about the ATM industry, as well as explore options regarding fees charged by credit-card networks.
The donation comes after independent ATM operators faced two direct threats to their businesses in less than two months.
BACKGROUND
In early April, Mastercard unilaterally reduced the transaction fee it pays to independent ATM networks while tripling the fee it charges to process Mastercard-branded cards or use its Cirrus network. Bottom line: Mastercard will siphon an additional $26 million a year from independent ATM operators — a transfer of wealth from thousands of small-business owners all across America to one of the world’s largest financial companies.
Then in mid-May, during Congressional debate over a financial-reform bill, Sen. Tom Harkin (D-Iowa) proposed an amendment that would have capped ATM surcharges at 50 cents — making most nonbank ATMs unprofitable to operate. Its passage would have resulted in ATMs disappearing from business establishments of all kinds, as well as destroying several thousand jobs.
Thankfully, the Harkin amendment was defeated. But the prospect of it being reintroduced in some form, as well as worries about future moves by Mastercard, has prompted the ATM Industry Association (ATMIA) to address the problem head-on with the creation of a “defense fund”.
THE FUND
The fund, made up of voluntary contributions from members and nonmembers, will pay for two things:
1. Legal advice in the wake of Mastercard’s profound changes to the industry’s fee structure.
2. A “white paper” on the nonbank ATM industry, to better explain what it does, how it works, and why proposals like Harkin’s would be disastrous for it.
ISSUES THAT AFFECT EVERYONE
Why should anyone outside the industry care? Let’s take a look.
In the case of the Harkin amendment, it’s pretty simple: a limit on ATM surcharges would make many ATMs unprofitable to own and operate.
Sen. Harkin clearly doesn’t understand the economics of nonbank ATMs. He assumes the only cost associated with an ATM transaction is the cost of processing — a cost erroneously estimated at 36 cents by Harkin’s staff.
But that ignores the cost of the ATM itself, as well as the time and cost of installation, maintenance, insurance, supplies and cash. Harkin seems to think that merchants would be happy to install and maintain a money-losing ATM. That’s simply ridiculous.
In the case of Mastercard and Cirrus, anti-competitive behavior hurts everyone who uses an ATM. Mastercard’s fee changes mean processing a Mastercard or Cirrus transaction is more expensive for merchants than, say, processing a Visa card. That leaves merchants with few choices — including raising surcharges for everyone (even if you don’t use Mastercard or Cirrus) or removing the machine because it’s no longer profitable.
None of the available options are good for either merchants or customers. The ATMIA fund will help the industry explore legal, regulatory and market strategies that would let us avoid such harmful choices.
WHAT CAN BE DONE
ATMIA has asked each member company to donate $500 to the fund. ATM Network has donated $3,000. We strongly urge others to step forward, too. You can donate online at the following links:
ATMIA members
https://www.atmia.com/unitedstates/membership/membershiprenewal
Nonmembers
https://www.atmia.com/unitedstates/membership/join
Thank you for joining us in this effort!
Monday, June 7th, 2010
Starting July 1, ATM Network’s transaction processor, RBS WorldPay, is changing its official end-of-day time.
It will move up one hour, to 3 p.m. Eastern time from the current 4 p.m. Eastern time.
That means that any transaction processed after 3 p.m. Eastern time will be included in the next day’s total.
Please be aware of this when you begin reconciling your ATM Portal, ATM journal and bank activity statements for July. If your ATM’s operating hours differ from the RBS schedule, your daily transaction count may differ from theirs.
UPDATE: RBS has since determined that it won’t need to change its end-of-day close after all. So it will stay at 4 p.m.
Wednesday, May 19th, 2010
Republicans and Democrats alike prevented Sen. Tom Harkin’s ATM fee-cap amendment from reaching the Senate floor on Tuesday night. Democrats are trying to get the main bill passed before the Memorial Day recess, so they’re only allowing debate on amendments that have strong support — and preferably bipartisan support. Harkin’s ATM amendment does not pass that test.
The amendment is not dead — Harkin could try to bring it up again, either with this bill or with a different bill later on in the session. But at this point it seems unlikely to be part of the current bill.
Meanwhile, here are a few more people speaking up to oppose the amendment.
From a letter in the Des Moines (IA) Register:
I have to tell you, Sen. Tom Harkin, how disappointed I am with your proposed 50 cents maximum per ATM withdrawal fees. I’m a small-business owner in the ATM business, not a bank, but a hard-working, tax-paying U.S. and Iowa citizen.
It is an absolutely ridiculous statement that ATM withdrawals cost us a mere 36 cents, Senator Harkin. I have quite a few ATMs and drive more than 1,800 miles per week. I have the cost of gas, a vehicle, the cost of the ATMs, the interest for the cash in the ATMs, etc. I pay my locations between 50 cents and $1.50 per withdrawal as I lease the space in the locations.
Is Congress going to stop the person who charges $2.29 for a cup of coffee versus the store that charges 99 cents? Is Congress going to put a cap on Nike shoes when a merchant charges more than $200 for a pair of shoes that cost him $65, but the demand is there, so he can charge what he wants?
The biggest difference is my ATMs have a screen that asks the customer if they agree to the charges. If not, they hit cancel.
— Jeff “Ole” Olson, Guttenberg
And the Cato Institute resurrects a paper from 1998, the last time a senator (in that case, Republican Al D’Amato of New York) proposed capping surcharges:
Consumers have the ability to obtain money from their bank accounts without paying a surcharge. ATM surcharges allow banks and other ATM operators to deploy machines in more convenient locations than might otherwise be possible. Customers who are unwilling to pay a surcharge incur the cost of inconvenience, while those who value the convenience more than the cost of the fee have the option of paying for it. Senator D’Amato, Rep. Bernie Sanders (I-Vt.)–Congress’s self-proclaimed socialist–and numerous consumer groups have formed an unlikely coalition to put an end to ATM surcharges. If successful, that campaign would limit the options of consumers, since there would be no means to support the more convenient ATM machines. Prohibiting ATM surcharges would only harm consumers by slowing the expansion of ATMs and reducing the number of ATMs currently deployed without making anyone better off.
The 1998 effort failed, which is why you find privately-owned ATMs all over the place, complementing the bank-owned ATM networks. It looks like the latest effort will fail, too — which is good for consumers and good for business.
Sunday, May 9th, 2010
With little warning and no consultation, Mastercard has changed the ATM fee structure for Mastercard-branded cards, as well as its Cirrus card network.
The changes are complicated, but they break down into two basic categories:
1. Mastercard pays an “interchange fee” on every ATM withdrawal involving its Mastercard/Cirrus networks. As of April 1, MasterCard cut those payments by 30 percent.
2. Mastercard charges a fee for any transaction involving its Mastercard and Cirrus networks. As of April 16, Mastercard more than tripled that fee.
Added together, Mastercard is cutting its per-transaction payment by more than 62 percent on most transactions — dealing serious harm to every nonbank company that deploys ATMs. Overall, the move is expected to cost the nonbank ATM industry up to $26 million a year.
Other cards and networks currently are not affected.
BOTTOM LINE
Here’s what it means for ATM owners and operators: As of April 1, Mastercard is taking an additional 28 cents or so from every Mastercard-related transaction processed by a nonbank ATM.
WHAT YOU CAN DO
We will give the Mastercard deduction its own line on our monthly statements, so you can see exactly how much this affects your residual amounts.
We recommend raising your surcharge to cover the Mastercard/Cirrus pass-through. You might consider urging your customers to use any other card, such as Visa, Discover, American Express or regional banking cards.
You can also contact Mastercard/Cirrus directly at 1-800-627-8372.
For further updates, announcements and current industry headlines, check the “News” section on our ATM Network home page.
Monday, May 3rd, 2010
The ATM business is sometimes described as “recession proof”, and stories like this are one reason why.
U.S. consumers are withdrawing more money from ATMs, likely the result of the economic recession, industry insiders say. In September 2008, when the recession was official, consumers started relying more heavily on cash and debit, and less on credit.
Gary Faulkner, the executive vice president and chief marketing officer of Morphis Cash Forecasting Software of Dallas, says it was around that time that U.S. ATM withdrawals started going up. He said many of his ATM customers started complaining that the Morphis forecasting tool was not meeting targets, and ATMs were often low on cash because of increased withdrawal amounts. Faulkner says ATMs that had been effectively managed by Morphis’ system for years were suddenly running out of cash.
“Starting in September 2008, customers were complaining that the forecasting was not right,” he said. “Nearly universally, our customers saw an increase in transactions and an increase in cash withdrawals per transaction.”
Faulkner says the volume of transactions increased as well. In fact, Faulkner estimates that the overall cash withdrawals from each transaction increased from roughly $65 to $75 a transaction to about $100 a transaction.
We’ve written before about the practice of using cash accounting to manage tight budgets — withdrawing a certain amount of money for holiday shopping or a weekly budget, and when the cash is gone, stop spending. We’ve also noted why a recession can be good for ATM usage.
Now the numbers are in. ATMs really *are* recession proof.
Monday, March 29th, 2010
Tax time can be a headache for many small business owners. It’s not just that business tax rules can be confusing and arbitrary. Spring is the time when you have to go through a year’s worth of saved receipts and paperwork, trying to find a specific number or form, and hoping you didn’t accidentally throw out or misfile an important piece of paper.
At ATM Network, we understand this very well. Every year at this time we get a lot of calls from our customers. Usually it’s because their accountant needs to know how much money they made on their ATMs last year, and they didn’t save all the monthly statements we sent them with their checks.
It’s an even bigger headache for people who own a lot of ATMs. Someone with 80 machines has to keep track of — and add up — nearly 1,000 different monthly statements. The headache can be enormous.
Then there are the checks themselves. Paper checks can get lost, stolen or damaged. They take days to arrive. And machine owners have to take them to the bank, physically endorse them and deposit them.
At the end of 2009, ATM Network took a big step toward making things easier for customers by switching from paper checks to electronic payments. Customer profits are deposited directly in their bank account — automatically, without risk, and usually 10 days or so earlier than with paper checks.
Now ATM Network has taken the next step with Webstatements, its online statement archive.
Instead of receiving and storing a paper statement, customers can login to their Webstatements account to view their machine’s financial results.
They can see total activity for all of their machines, or view each machine individually. They can sort results by month and year. And if they do want paper copies, they can print out individual statements for all of their machines with a single click of the mouse.
The online statements contain all the information that used to be on ATM Network’s paper statements: profit information, daily activity, network activity, and more. So it’s easy to see at a glance how a machine is being used and how profitable it is.
Webstatements works in conjunction with ATM Portal, an online reporting service that tracks up-to-the-minute activity and keeps track of daily operating items like how much cash remains in each machine. ATM Portal provides daily reporting; Webstatements provides monthly summaries, as well as customer-specific financial information unavailable through ATM Portal.
It’s just one more way that ATM Network provides its partners with top-of-the-line service and accountability.
Thursday, February 11th, 2010
Nautilus Hyosung has developed software that will let ATMs sell Quick Pick lottery tickets.
Nautilus Hyosung America Inc. has partnered with Linq 3 to enable the purchase of quick pick lottery tickets on Nautilus Hyosung’s CE ATM models. Nautilus has been developing the software application for the CE models and will demonstrate the quick pick functionality during next week’s ATM Industry Association conference in Miami.
Linq3 developed the secure links to state lottery commissions that makes the whole thing work.
The software will work on any Hyosung machine running Windows CE. That includes the 1800CE and 5000CE.
All new CE models will ship with the software, and already-installed machines can get a software update to run it.
Monday, December 28th, 2009
The basic idea of an ATM isn’t complicated: give customers an easy way to get cash and you’ll attract customers, increase spending in your store and earn surcharge revenue — never mind the savings on bad checks and credit-card transactions.
But taking some time to think about how and where to use your ATM will help you get the most out of it.
A recent report on ATM site-planning offers an idea of what’s involved. It focuses on banks, but many of the concepts also apply to retail locations. For example:
Placement. Is the machine visible and accessible? Can people use the machine without getting in the way of other customers? Is there enough space to accomodate a small line of people waiting to withdraw cash?
Security. This involves two aspects: security for customers, and security for the machine itself. If the ATM is inside the store, is it visible to the desk clerk or security cameras? Is the area around the ATM open and well-lighted? If the ATM is outside, is it bolted down or in a locked enclosure? If the ATM is hidden from view, it puts customers at risk and increases the possibility of attempted theft.
Advertising. Do signs clearly and prominently advertise the existence of the ATM? Do interior signs clearly direct customers to the machine? If customers don’t know you have an ATM, they won’t stop in to use it. If the ATM is hard to find, fewer people will use it. Proper location and signage work together to maximize ATM usage.
Regulations. Standalone ATMs usually don’t require permits — just hook them up inside your store and you’re ready to go. But anything that involves construction (like through-the-wall ATMs) or external structures (like ATMs placed outside in kiosks or other enclosures) is probably subject to zoning and construction laws. Check with your city’s building inspectors to find out what is needed and allowed.
Power and communications. Every ATM needs two things: a power supply, and some way to communicate with transaction processing networks. Keep that in mind when picking a location. Consider the ease/cost of running power and either a phone line or Internet connection to the desired location. If that’s a problem, or if you just want more flexibility, consider a wireless option. You still need the power supply, but by using cellular phone networks for communication you save on the cost of running a communication line, and you can place the machine anywhere you can run a power cord.
The article goes on to discuss the implications of changing consumer behavior: notably, the total comfort that people under 30 have with doing all their financial business through ATMs and kiosks. ATM owners that are ready to serve that population will benefit the most in the coming years.
Nicole Sturgill, of TowerGroup, noted that self-service financial transactions have expanded to include both the traditionally underbanked as well as consumers who may have lost access to credit or bank services through recent hardships. The growth of prepaid debit for payroll and money transfer has fueled the resurgence of cash.
“At both ends of the spectrum we are seeing the transaction volumes at the ATM going up fairly quickly,” Sturgill said.
Another factor driving the advancement of ATM functions just may be a generational shift. Consumers under the age of 30 or so have grown up using self-service machines in restaurants, airports, grocery stores and many other venues. With direct deposit of paychecks, online banking and debit cards, many young consumers may never set foot in a traditional bank branch.
And that means opportunity for non-bank ATM owners.
So take a few moments to think about how an ATM fits into your business model. Then find a location that minimizes installation costs while maximizing usage, and watch your ATM become a pillar of your business.
Friday, November 20th, 2009
Buying an ATM involves two related but different transactions: buying a machine, and finding a processing company to handle the transactions for the machine.
Many buyers focus heavily on the first transaction, and that’s understandable: they’re spending a couple thousand dollars on a piece of hardware. They want to make sure they get the right machine at a good price, along with decent after-the-sale support like shipping, installation, training, warranties, repairs and so on.
But a lot of ATM owners don’t pay enough attention to the second transaction, and that’s a mistake: in the long run, the processing company you choose will have a bigger effect on your business than the model of ATM you bought or the price you paid for it.
Consider two owners who buy the same machine. One pays $2000; one pays $2500. The machines both earn $500 a month, on top of the other ATM benefits like increased sales and reduced bad-check charges.
The first owner will pay off the machine in four months; the second owner will pay it off in five months. After that, there’s no difference in the profitability of the machines.
But processing contracts tend to cover long periods of time — five years or more. So the processing company you choose will affect your business long after you’ve forgotten how much you paid for your machine. That’s why it pays to choose your processor even more carefully than you choose your machine.
Here are some things to look for in a processing company:
You’re going to be trusting your business to your processor for a long time. You want some assurance that they will be around for the long haul. Find out how long they’ve been in business and how many machines they handle processing for. Ask for customer testimonials or industry endorsements.
This is a big one. You depend on your processor for all of your ATM profits. They’re responsible for calculating your surcharge revenue and paying it to you every month, accurately and on time. Your processor also reimburses you for money that customers withdraw from the machine. Can you trust them to handle all that money and get it to you on time, every time?
In Arizona, for example, an ATM company named Global Cash was recently fined and nearly barred from doing business in the state because it defrauded banks by miscoding cash advance transactions and then misled regulators about it.
In California, the owner of All States ATM recently pleaded guilty to charges of defrauding investors by claiming to be an eight-year-old company with hundreds of employees and ATMs, when in fact there was nothing.
Clearly, you don’t want to trust your money and ATM income to a processor that is at risk of legal trouble or willing to cut ethical corners. Either one can hurt your business, even if you’re not a direct victim of their actions.
Does the company merely process transactions? Do they have a service department in case your machine breaks down? Do they offer on-going technical support for operating your machine? Do they provide guidance on how to get the most value out of your machine through proper placement, signage and use? Do they offer ways to upgrade or customize your machine, such as wireless connections, advertising surrounds or custom advertising screens? When you have problems or questions, are they easy to reach? Or do you always get voicemail and they never return your calls?
Do your homework on your processing company, and you’ll be much happier — and more profitable — in the years to come.
So how does ATM Network stack up? Quite well, we think. Some things to know about us:
Even better, processing with ATM Network costs you nothing. We make our money from your customers’ banks, not you. So you keep 100% of your surcharge revenue while knowing your processing is being handled by one of the most stable, responsive and trustworthy companies in the business.
We also offer great prices on ATMs. Why? Because we make money on processing. Without the machine, there are no transactions to process. So we sell our ATMs almost at cost in order to get your processing business. Then we ship it to you for free, advise you on the best place to put it, install it, train you to operate it and give you signs to advertise it.
That’s why we’ve been in business for 13 years. It’s why we have thousands of locations, and a long list of endorsements and testimonials. And it’s why thousands of smart ATM owners trust us to handle their processing.
