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October 12th, 2010
For a recent installation at an Asian restaurant in downtown Minneapolis, the owner wanted his ATM to look like part of the decor. We came up with a design that had a dragon wrapping itself around the sides, front and top of the ATM.
Our designs last for years, thanks to durable materials and our detailed installation process. Use it to help your ATM blend in — or use it to help your ATM stand out, either as a marketing tool or even a piece of art.
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.
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.
July 2nd, 2010
Want to win a real ATM filled with cash?
You can…. if you play the Win For Life game run by the Georgia Lottery.
Nonwinning tickets can be entered in a second-chance drawing. On July 31 a grand-prize drawing will be held. The top prize? A real Tranax 1700W ATM, provided by ATM Network and filled with $52,000 in cash.
The ATM itself is worth a couple of thousand dollars, so it’s really a $54,000 payoff. And if you find a location to install it (with free processing from ATM Network), it could be the start of a business.
The promotion is being advertised with full-size cardboard displays (that’s what the picture’s of) in more than 8,000 stores statewide, with the ATM Network logo right in the center.
Who says ATMs can’t be fun?
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.
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.
June 24th, 2010
Editor’s note: ATM Network technicians have the experience to solve even the thorniest problems, and routinely go above and beyond to do so. This is one such story.
One day the ATM Network service department got a call from a bar and grill in southern Minnesota. Their ATM had suddenly stopped contacting the transaction processor, rendering it useless. When it printed receipts, they said “System unavailable.”
The technician had the owner print out the machine’s electronic journal, which showed that the the ATM was running into “protocol errors”. That usually meant that transactions were getting interrupted in the middle of processing. The most common causes all involve the phone line: too much static, interference from a DSL connection, a shared phone line or (for technical reasons), phone service provided by cable companies.
Further questioning, however, revealed that the bar didn’t have cable TV, much less cable phone service. It didn’t have an Internet connection of any sort, so there wouldn’t be any DSL interference. And the ATM had its own dedicated phone line.
That left static on the line. The tech called the local phone company, which checked its lines and said they were fine. But just in case, they installed a DSL filter to block DSL interference.
A couple of days passed, and the customer called back: the ATM still wasn’t working. In the meantime, the techs had gotten another call from a customer in a neighboring town. He had two machines: One was on an Internet connection, and it was working fine. The other used a phone line, and it was having exactly the same problem as the first customer.
The tech asked which phone company owned the line. It was the same company that served the first customer. This wasn’t unusual: the company serves a large swath of southern Minnesota. The tech called the company and told them a second machine was down. The company checked that line, too: it was fine.
Then a third customer called with the same problem. Different machine, different model – but the same phone company.
The tech thought about it for a little bit, then looked up the phone company’s service area and began calling ATM Network customers in the area. He found four more clients with ATMs that couldn’t communicate with the transaction processor.
He called the phone company for the third time and told them what he found. They still insisted it wasn’t their fault, and suggested it might be ATM Network’s server.
The tech seriously doubted that, but to be sure he called up merchants who had ATMs from competitors that didn’t use our processing network. They, too, reported processing problems.
He called the phone company a fourth time. The company said it couldn’t be their fault, but they’d look into it.
Two days later, everything started working again. The phone company never admitted anything.
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!
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.
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.
