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Friday, May 21st, 2010
Good sense prevailed in the nation’s capital on Thursday, when the Senate passed the financial-reform bill — without even considering an amendment by Sen. Tom Harkin to cap ATM fees at 50 cents.
Thank you to everyone who called, faxed or wrote their senator to oppose this ill-considered amendment.
Monday, May 17th, 2010
Part of the financial reform bill making its way through the Senate could have a big effect on ATM owners.
An amendment sponsored by Sen. Tom Harkin, D-Iowa, would cap ATM surcharges at 50 cents. The national average is currently around $2.00.
The amendment is based on three fundamental misunderstanding about ATM fees:
Let’s discuss those in order.
1. While banks may have other reasons for installing and maintaining ATMs, most ATMs in this country are nonbank. They’re privately owned ATMs in grocery stores, gas stations, bars, restaurants and other small businesses across the nation. The merchants that own the machines set the surcharge and keep all of it; it’s their compensation for the cost of providing convenient access to cash.
2. Those costs are real. Besides the cost of the machine itself, there’s the cost of supplying it with power and a communication link, the cost of maintenance, and the labor involved in keeping it loaded with cash and paper.
A $2.00 surcharge allows the typical ATM owner to pay off their initial investment in 6-10 months, and then earn a reasonable profit after that. With a 50-cent surcharge, it could take up to *3 years* to pay off the initial investment, and after that the merchant would earn only a small profit — maybe $100 a month for a typical machine.
No business owner is going to invest that much time and money for such a small return. So if a 50-cent cap were imposed, most nonbank ATMs would simply disappear.
3. The market works just fine when it comes to surcharge levels. Government intervention in market pricing might be justified when the free market is unsable to set fair prices. But in this case the free market is working just fine. ATM surcharges are transparent and easily avoidable, and the sheer number of ATMs means customers always have a choice. They can go down the street to a machine with a lower surcharge, or to an ATM owned by their bank. They can skip the ATM altogether and pay with credit cards or checks. Or they can do what they did before ATMs became widespread: stand in line at the teller window.
You may think that saying “ATMs will disappear” is alarmist. It’s not. How do we know? Because we’ve been there before.
Until 1996, ATM surcharges were illegal. The only ATMs available were owned by banks. Their ATM networks were money losers, but were cheaper than paying human tellers. But because each ATM lost money, they weren’t going to install any more ATMs than absolutely necessary.
Then in 1996, Congress legalized ATM surcharges. And the ATM industry was born. The number of ATMs in the country exploded.
The Harkin amendment will take us most of the way back to the pre-surcharge days, costing jobs and hurting the bottom line of hundreds of thousands of small businesses in the process.
That’s why industry groups are campaigning against it. It’s why the moderate Brookings Institution opposes it. Even independent observers like CNN have pointed out the downside.
The amendment comes up for a vote later this week. With luck, logic will prevail.
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, 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.
Wednesday, November 25th, 2009
The holiday season is here, and that means figuring out a budget for presents. That can be tough at any time, but it’s especially difficult — and important — given this year’s slack economy.
The first thing, obviously, is to stay within your means: Don’t give gifts you can’t afford. But that can be easier said than done. If you need to get the most out of your holiday shopping buck, it helps to have a strategy. And as the Houston Chronicle points out, ATMs are a useful part of that strategy.
Their first tip: Shop early. You’ll get better selection and prices, especially on end-of-summer closeouts.
Their second tip: Rely on cash.
Shop only with cash this year. Credit card interest rates are going up in anticipation of a new credit card law that restricts how and when card issuers can raise rate. If your rates have gone up and you don’t pay off the balance every month, your Christmas debt will last longer in 2010 than it did this year. Cash also helps you stay within your budget because when the dollars are gone, that’s it. Trekking to an ATM to take out more cash gives you a long pause in your shopping that you can use to talk yourself out of overspending. That kind of break in the action doesn’t come when you are writing checks or swiping credit cards.
Use layaway plans. This will help you stick with the cash-only edict by allowing you to put aside items in layaway until you can pay them off in installment payments. There tends to be a small flat fee for using the service. Major retailers that offer layaway options include Burlington Coat Factory, Marshalls, T.J. Maxx and Toys R Us. K-Mart and Sears are also providing online layaway programs. It also doesn’t hurt to ask local small business owners if you can set up a pre- and post-holiday cash payment plan for big-ticket or one-of-a-kind gifts, such as jewelry, art work and treehouses.
Give cash. Cash is freedom. Your loved one can use it for whatever he or she really needs — which may be to pay rent, a utility bill or catch up on a debt payment. Your child’s teacher can use money more easily than a gift card to a coffee chain or restaurant.
So put away the credit card — and its temptation to pay just a little more, or buy just one more thing. Decide how much you’re going to spend, take out that much money, and either buy presents for cash or give the cash itself as a gift. You’ll be happier, the recipients will be happier, and you won’t face that post-Christmas hangover when the bills arrive.
Thursday, October 22nd, 2009
NCR Corp., the big maker of high-end ATMs for banks that last week lost its CFO, said it would cut 2,200 jobs, or about 10 percent of its workforce, after earnings fell 81 percent on a revenue drop of 11.6 percent in the third quarter.
The company blamed the global economic slowdown, which hit banks and financial institutions — its main customers — particularly hard.
If you want the gory details, read the full earnings report.
Wednesday, May 20th, 2009
The monthly check that ATM operators get are great, aren’t they? But while we’re sure nobody forgets to cash their check, a lot of ATM owners throw out the check stub without a second thought.
Don’t! Those stubs tell you how much you’ve earned from your ATM, and at the end of the year you’ll need them to calculate your yearly income.
They also contain valuable activity information for your ATM machine. Each stub tells you several useful things:
The stub also breaks down transaction activity by day. So you can see, for example, that on May 5th your ATM handled 9 transactions that withdrew a total of $480, while on May 7 there were just 4 transactions for $120.
How is this information valuable? Lots of ways. By tracking customer activity, you can make sure to have enough cash in the ATM on your busiest days. You can gauge how your advertising and marketing affect ATM usage and how ATM usage affects sales. You can see which network is most popular with your customers, which might guide marketing decisions.
So cash the check. But keep the stub.
