Archive for the ‘Industry news’ Category

Florida bank deploying solar ATMs

Wednesday, June 29th, 2011

A lender in Florida plans to deploy 100 solar-powered ATMs throughout the Miami area:

Expert Group, Inc. announced today that it will deploy the region’s first solar-powered ATM. The ATMs will be installed throughout Miami in high traffic outdoor areas, said Robert Rico, Chairmen of Expert Financing, Inc.

The ATMs are powered by solar panels installed on the top of the ATM. The panels are connected to a circuit breaker board, which feeds a power controller. Part of the collected energy is stored in the power controller for the ATM’s night operation.

The city of Miami has been encouraging businesses to use solar power where possible. Unlike earlier efforts that had some bugs to work out, Expert Group — which does business as Expert Financing — is confident that their machines won’t get overloaded when they get drenched with sunshine.

“We are planning to put 100 solar-powered ATMs in various areas in Miami in the near future,” Rico said. “The wonderful thing about these machines is that they are not costly and will provide our customers with the chance to contribute to helping the environment.”

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Visa, Mastercard agree to let merchants prefer low-fee cards

Wednesday, October 6th, 2010

On Monday the Justice Department announced a settlement with Visa and Mastercard over the fees they charge merchants for accepting their cards. It also filed suit against American Express after failing to reach a settlement with that company.

As we noted recently, the previous rules prevented merchants from treating higher-cost cards differently. They couldn’t refuse to take high-fee cards (they either had to accept all Visa cards or none, for example). They couldn’t encourage customers to use low-fee cards. They couldn’t charge more for purchases made with high-fee cards. They couldn’t even charge less for purchases made with low-fee cards.

ATM owners face a similar situation: Visa, Mastercard and American Express pay a small fee when their cardholders use an ATM. (They also sometimes charge a fee as well). But rules imposed by the card-issuers prevented merchants from charging a lower surcharge for withdrawals made with lower-fee cards. That left merchants with only bad choices when a card-issuer raised their fees: Absorb the expense, raise the surcharge for all users, or shut down the machine.

It’s unclear how the settlement will affect ATM transactions. And there will be a technological hurdle: most ATMs in use today are not equipped to charge different surcharges for different cards. But this is clearly a step in the right direction, and a victory for consumers and small businesses.

Tags: ATM, atm fees, atm industry, ATM machine, ATM machines, ATM surcharge, ATMs, Cash machine, Credit-card fees
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RBS Worldpay sold to new owners

Tuesday, August 10th, 2010

Last November, RBS Group — the parent company of RBS WorldPay, which handles ATM processing for ATM Network — received financial help from the British government. As part of the agreement, RBS Group agreed to divest itself of RBS WorldPay.

Now the new owners have been found, and the sale finalized.

Royal Bank of Scotland Group Plc, the U.K.’s biggest government-owned bank, agreed to sell its credit- card payment processing unit to Advent International Corp. and Bain Capital LLC for 1.7 billion pounds ($2.7 billion).

RBS may receive a further 200 million pounds if the buyers’ returns hit certain targets, the Edinburgh-based bank said in a statement today. RBS will keep a 20 percent stake. It will also book a gain from the sale of about 850 million pounds after goodwill, separation and transaction costs, the bank said.

RBS is being forced to dispose of the unit to comply with European Union state-aid rules after taking 45.5 billion pounds in a taxpayer-funded rescue during the financial crisis. The bank announced this week the sale of 318 branches to Banco Santander SA to comply with the ruling, and must also dispose of its insurance division.

Advent and Bain Capital are private-equity firms. Such firms typically buy distressed companies, operate them for several years, then sell them at a profit.

But they also will operate profitable businesses on occasion, and that appears to be the case here. RBS has been steadily profitable, reporting $400 million in profits last year, and Advent and Bain appear to regard it as a good place to park investment money while the world recovers from global recession.

Advent also owns a 51 percent stake in another payment process, Fifth Third Processing Solutions, but said there are no plans to combine the processing companies.

The companies anticipate no changes in day-to-day operations, and the ownership change shouldn’t even be noticeable to ATM owners. If changes crop up in the future, ATM Network will notify ATM owners and help them adjust.

Tags: ATM, atm industry, ATM Network, ATM operators, ATMs, Cash machine
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Tranax files for bankruptcy

Thursday, July 1st, 2010

After losing a $5 million court fight with former partner Nautilus Hyosung, ATM manufacturer Tranax Technologies has filed for Chapter 7 bankruptcy liquidation.

Tranax Technologies Inc., an ATM manufacturer that sells machines to independent sales organizations, has filed for Chapter 7 voluntary bankruptcy, citing debts of $1 million to $10 million. Tranax said its assets equal its estimated liabilities.

The Hayward, Calif.-based company filed June 11 in United States Bankruptcy Court for the Northern District of California in Oakland. In its bankruptcy filing, obtained by ATMmarketplace.com, Tranax listed 13 creditors, including Hyosung Corp. of America.

Tranax’s bankruptcy filing occurred less than a month after U.S. District Court Judge Vaughn R. Walker entered a judgment May 25, ordering Tranax to pay Hyosung America Inc. and its parent company, Nautilus Hyosung Inc., $5.01 million plus daily interest of $1,742.52 until Tranax pays its debt. Nautilus Hyosung had to wait 14 days from that date before taking action to seize property to satisfy Walker’s ruling. Walker issued his ruling May 6.

As noted in our earlier post, there may be more to the bankruptcy than first appears:

In 2008 Tranax was acquired by Hantle USA. This year, the company announced that Hantle would take over ATM marketing, while Tranax would focus on kiosks, scanners and ATM components. Hyosung is now suing Hantle USA, alleging that Hantle USA has taken over many of Tranax’s assets, making it difficult for Hyosung to collect the judgment.

Chapter 7 means Tranax will be shut down and its remaining assets sold off to satisfy creditors, including Nautilus Hyosung. But while the Tranax name will go away, Tranax’s line of ATMs and ATM products will continue to be sold and developed under the Hantle brand.

However, if Nautilus Hyosung persuades a court that Hantle improperly transferred assets out of Tranax in order to avoid paying Nautilus the $5 million court award, then Hantle USA or its parent could be on the hook for the money.

In any event, a name associated with the explosive growth of the non-bank ATM industry is going down in a lawsuit-inspired bankruptcy.

Tags: ATM, atm industry, ATM machine, ATM machines, Cash machine
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RBS won’t change end-of-day time after all

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.

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ATM Network contributes $3,000 to ATMIA fund

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!

Tags: ATM, ATM machine, ATM machines, ATMs
Posted in ATM operators, ATM owners, Company news, Industry news | 1 Comment »

Nautilus Hyosung wins lawsuit against Tranax

Friday, May 28th, 2010

A federal court has upheld a $5 million arbitration award against Tranax Technologies, ordering it to pay Nautilus Hyosung for ATMs and parts it received but did not pay for in 2006 and 2007.

The case stemmed from the contract dispute between Hyosung and Tranax that led to Hyosung dropping Tranax as it’s U.S. distributor and Tranax becoming an ATM manufacturer in its own right.

Starting in 1998, Tranax was the U.S. distributor for Hyosung ATMs. Then in 2006, Hyosung discovered that Tranax was substituting another manufacturer’s cash dispensers in some Hyosung models. Hyosung suspended shipment of the models in question; Tranax responded by suspending payment on all outstanding invoices.

Hyosung ended Tranax’s distribution contract in January 2007 and filed an arbitration grievance over the unpaid invoices later that year, alleging Tranax had breached the terms of its distribution contract.

In February, the arbitration panel ruled in Hyosung’s favor and ordered Tranax to pay the full amount of the unpaid bills, plus interest. On Wednesday, a federal court upheld the ruling.

Tranax did win one small victory: it had long sold Hyosung ATMs using the “Mini-Bank” trademark, and the arbitration panel ruled that Tranax owned that trademark. So Hyosung has stopped using the term in its advertising.

The story isn’t over yet. In 2008 Tranax was acquired by Hantle USA. This year, the company announced that Hantle would take over ATM marketing, while Tranax would focus on kiosks, scanners and ATM components. Hyosung is now suing Hantle USA, alleging that Hantle USA has taken over many of Tranax’s assets, making it difficult for Hyosung to collect the judgement.

Stay tuned.

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Inventor of “first” ATM dies

Tuesday, May 25th, 2010

John Shepherd-Barron, a Scotsman often credited with inventing the world’s first automatic cash machine, has died at age 84.

Whether you think he’s truly the inventor of the ATM depends a little bit on how you define “ATM.” The machine he invented bears little resemblance to modern ATMs:

The first automatic teller machine, now known as ATMs, was installed at a branch of Barclays Plc in a north London suburb on June 27, 1967.

Plastic bank cards had not been invented yet, so Shepherd-Barron’s machine used special checks that were chemically coded. Customers placed the checks in a drawer, and after entering a personal identification number, a second drawer would spring open with a 10 pound note.

Two years later, a completely different machine, invented by a completely different person, was installed at a bank in Manhattan. That machine was the first modern ATM, and all subsequent models were patterned after it, not Shepherd-Barron’s machine.

Shepherd-Barron also claims credit for inventing four-digit Personal Indentification Numbers (PINs):

Shepherd-Barron originally planned to make personal identification numbers six digits long, but cut the number to four after his wife Caroline complained that six was too many.

“Over the kitchen table, she said she could only remember four figures, so because of her, four figures became the world standard,” he told the BBC.

As with many world-changing inventions, the ATM was an idea being worked on by several different people at the same time. Barron’s machine came first, but because of the cumbersome interface, didn’t catch on. It was a company named Docutel, selling a machine invented by an American named Don Wetzel, who produced the first commercially successful ATM.

But both men can claim credit for an idea that launched a financial revolution. There are now nearly 2 million ATMs installed worldwide. And it all a little over 40 years ago today, in the minds of a Scotsman and a Texan.

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Senate passes financial reform — without ATM fee caps

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.

Tags: ATM, atm industry, ATM machine, ATM machines, ATM surcharge, Cash machine
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Harkin amendment blocked in Senate

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.

Tags: ATM, atm fees, ATM machines, Cash machine
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