Archive for the ‘ATM operators’ Category

Site planning helps maximize ATM’s value

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.

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Can you trust your ATM provider?

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:

Do they have a track record?

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.

Are they trustworthy?

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.

What services do they provide?

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.

ATM Network

So how does ATM Network stack up? Quite well, we think. Some things to know about us:

We’ve been in business for 13 years.
In that time we’ve grown steadily, and now service more than 5,000 locations.
We’ve been a member of the Better Business Bureau since 2001.
We’re listed on Dun & Bradstreet.
We have a nationwide service and parts department, staffed with skilled technicians who can fix your machine or help you access advanced features.
We’re the exclusive online ATM provider for Sam’s Club.
We have lots of customer testimonials and industry endorsements.
We provide 24/7 customer service, with fast, helpful response times.
We offer automatic direct deposit of your money — on time, every time. Every day we reimburse you for customer withdrawals, and every month we send you your surcharge income.
We offer lots of customization and upgrade options, as well as kiosks and advertising surrounds.

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.

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ATM maintenance tips

Friday, October 16th, 2009

prepping

Cash machines are fairly rugged devices. And other than the initial cost of buying one, they’re basically free to operate — the only expenses being receipt paper and the time it takes to keep them loaded with cash. Once the machine is paid off, the income from it is almost pure profit.

But it’s still a machine. And if you neglect it, it will require repair or replacement sooner than it would otherwise.

With that in mind, here are five easy maintenance tips for keeping your ATM working and profitable for years to come.

1. Keep it clean. Not only does cleaning help keep the machine running, but a clean machine is more attractive to customers as well. Use a damp (not soaking) cloth to wipe down the exterior and screen and clean grime off the keypad. Use canned air to blow dust off of sensors and other parts that are fragile or hard to reach. Clean the inside, too.

2. Consider the power supply. Frequent power surges can drastically shorten the life of your machine. Surges are much more common when a power line is shared with other large machines, such as food coolers or air conditioners. They can also be caused by storms or problems with your local power grid. Avoid putting your ATM on the same line as a major appliance, and buy an inexpensive surge protector for your ATM to plug into.

3. Keep it on. As with any computer, constantly turning an ATM on and off wears it out more quickly than just leaving it on. ATMs are designed to be left on, and there isn’t much difference in power consumption between an idle ATM and one that is turned off.

4. Be gentle. ATMs are built to withstand a lot of abuse, but being careful with interior parts reduces wear and tear. Don’t yank the cash box out, or jerk it out at an angle: that can break the clips and tracks that hold it in place. When removing receipt paper from the printer, gently guide it through rather than ripping it out. Ripping can throw off the paper feeder’s alignment, causing printing problems.

5. Get a periodic checkup. ATMs don’t really need much in the way of preventive maintenance. But it doesn’t hurt to have a technician give the machine a once over every now and then. They can check the dispenser for signs of wear, clean the rollers and clear dust and grime out of the mechanisms. They can check through the error logs to spot problems, and fix them before they lead to the machine being down. Whether this step makes sense for you depends on your situation. For a low-traffic machine, it’s neither necessary nor worth it. But for a high-traffic site — where the machine gets a lot of use, and even a day of downtime means significant loss of revenue — regular checkups can pay dividends.

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Will IBM antitrust case affect you?

Thursday, October 8th, 2009

The business media are abuzz this morning with reports that the Justice Department is investigating antitrust complaints against IBM in the mainframe computer market.

The Computer and Communications Industry Association (CCIA), a trade group of computer hardware and software makers, alleges IBM — which holds a dominating share of the mainframe market — has stifled competition by refusing to license its software to user unless they also buy an IBM mainframe computer. It has also yanked software licenses from users who are found to be running the software on competitor’s machines.

Mainframe computers are big, expensive ($1 million-plus), powerful and reliable machines that handle tasks requiring high security, blazing speed or a high number of transactions.

How does this affect ATM owners and users? Because as part of processing a transaction, ATMs usually contact bank computers to verify account balances and transfer funds — and those bank computers often are mainframes.

If IBM is found to have violated antitrust law, it would probably mean more competition in the mainframe hardware and software markets. That would mean lower prices, which means a lower cost for building and operating a mainframe network. That potentially saves ATM operators money in two ways:

By reducing the bank’s costs, it could reduce the fees that banks charge for access to their networks.
That reduced cost might encourage more banks, credit unions or other players to build their own system, increasing choice and competition among banks and thereby reducing access fees.

A similar dynamic might play out in the credit-card market, with lower costs leading to lower fees for merchants and lower prices for customers.

Don’t expect immediate changes. The government might decide that IBM didn’t violate antitrust law, and even if they decide to pursue a case, it will likely take years to resolve. But it’s an example of how a seemingly arcane and remote event can reach down and affect people like us.

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Banks raise surcharge fees 12.6%

Thursday, October 1st, 2009

Here’s something you might not expect: it’s now cheaper for people to get money from non-bank ATMs than it is to withdraw cash from banks they aren’t customers of.

That’s according to Bankrate.com, whose annual survey of bank fees and charges came out today. Here’s what they have to say about bank ATM surcharges:

Slapping a fee on your tab every time you use an ATM that doesn’t belong to your bank is another way banks generate fee income. According to our 2009 Checking Study, this year the average fee leapt 12.6 percent to $2.22. Nearly 99 percent of banks impose a surcharge.

So banks now charge noncustomers an average surcharge of $2.22 for using their ATMs.

Nationally, the average surcharge for non-bank ATMs (the kind you find in gas stations and convenience stores) is about $2.00.

That means if customers can’t find an ATM owned by their bank, they’re better off finding a gas station with an ATM than going to a competing bank. If this trend continues — and there’s every indication it will, as banks continue their longstanding practice of using increased fees as a way to boost revenue — people will get used to seeking out nonbank ATMs as a first resort.

That could end up having an interesting effect on the ATM industry. If people avoid bank ATMs in favor of private ones, banks will start to lose out on surcharge revenue. Which means they’ll have less incentive to expand their ATM networks. Which could lead to a creeping democratization of the ATM industry, as bank networks stagnate and nonbank ATMs make up a larger and larger share of the available machines.

Banks might eventually decide that it makes more economic sense to reimburse customers for using nonbank ATMs than it does to maintain their own fleet of ATMs — a strategy already used by small banks (who can’t afford a big network of machines) and online banks (who don’t have any branches to put ATMs into). With third-party machines increasingly able to handle traditional bank functions like accepting deposits, that scenario gets more feasible with each passing year.

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Stadium Village gets cash access upgrades

Wednesday, September 23rd, 2009

TCF Bank Stadium, as seen from the sidewalk outside Sally's Saloon.

With the opening of the new TCF Bank Stadium on the University of Minnesota campus, the Stadium Village shopping district once more lives up to its name (indeed, you can buy t-shirts that read “Stadium Village: Now with stadium.”).

Anticipating a surge of cash-strapped fans, two ATM Network clients prepared for the rush in different ways.

Stub & Herbs has been a campus staple for 70 years.

Stub & Herbs, the campus drinking and dining staple, has an ATM Network machine inside. For the home opener on Sept. 12 they opened an expanded outdoor “beer garden”, and plan to add tailgating space for future games. The result: sales that were five times a normal Saturday.

Sally's new through-the-wall ATM.

Just down the street, Sally’s Saloon has been in business for 17 years. They also have an ATM Network machine inside. But Sally’s decided on a more innovative response to the new stadium: adding a second through-the-wall ATM to serve street traffic. Their strategy is twofold: extra surcharge revenue from passers-by, and advertising screens that encourage people who just got cash to stop in and have a drink or a bite to eat.

A close-up of Sally's new ATM. The owner built the wooden enclosure; ATM Network installed the machine.

A customized ad screen encourages ATM users to stop inside.

Both examples show how successful business owners get the most out of their ATMs. For them an ATM is a convenience for customers, a revenue source and a marketing tool, all in one compact package.

Go Gophers!

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ATMs crucial for convenience store growth

Friday, September 18th, 2009

From Canada comes a case study of what ATMs mean to convenience stores.

It’s the story of Alimentation Couche-Tard, the largest convenience-store chain in Canada with 2,000 stores (it also operates the Circle K chain in the United States). They decided that ATMs are a key to their continued growth. Here’s why:

The technology is part of Couche-Tard’s strategy of transforming the typical trip to the c-store from an impulse stop to a destination.

Competition from groceries has increased in recent years, blurring the line between quick-stop and full-service retail establishments. Grocery stores are opening earlier and closing later, and they offer more pre-packaged food and more one-stop shopping services, such as prepaid phone cards and lottery tickets, than they have in the past. An ATM has become de rigueur for a convenience
store, from a customer-service standpoint as well as a proﬁtability perspective.

“First and foremost, ATMs are for the convenience of our customers,” said Steve Lévesque, product category manager, whose job includes oversight of Couche-Tard’s Eastern Canada ATM network.

That convenience draws what Lévesque calls “new money” into the stores.

“ATMs serve as a destination for us, and customers who would not otherwise come into our stores use the ATMs. So we generate revenue there as well as some impulse sales,” he said.

It makes sense: ATMs embody the “convenience” aspect of convenience stores. And by drawing in new customers and increasing sales (not to mention surcharge revenue on transactions and the ability to sell on-screen ads), they add immediately to the bottom line. And with ATMs cheaper than ever before (ATM prices have fallen 75% in the last decade), it’s never been easier to harness that profit.

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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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Graphics increase ATM allure

Tuesday, September 8th, 2009

wrapped

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.

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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.

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