Posts Tagged ‘Cash machine’

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
Posted in ATM operators, ATM owners, Company news, Industry news | No Comments »

Georgia Lottery selects ATM Network for lottery promotion

Friday, 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?

Tags: ATM, ATM for sale, ATM machine, ATM machine for sale, ATM machines, ATM Network, Cash machine, Endorsements, Fun
Posted in Company news, Endorsements, Fun | No Comments »

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
Posted in Industry news, history | No Comments »

Tech Tales: The case of the bad protocol

Thursday, 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.

Tags: ATM, ATM machine, ATM machines, ATMs, Cash machine
Posted in Company news, Fun, Maintenance, Tech Tales | No Comments »

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
Posted in Finance, Industry news | No Comments »

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
Posted in ATM benefits, ATM operators, ATM owners, Industry news, history | No Comments »

Phil Rock statement on ATM fee caps

Monday, May 17th, 2010

Today, ATM Network founder Phil Rock sent the following letter to key senators regarding a proposed cap on ATM fees.

If you agree, please link to this post. You can also email a copy of the letter to your senator using the links at the bottom of this page. Or sign the ATMIA petition.

May 17, 2010
The Honorable Christopher Dodd
448 Russell Building
Washington, D.C. 20510
Dear Senator,
I am writing to urge you to oppose Amendment #3812 to S. 3217, the Restoring American Financial Stability Act of 2010, which places caps on ATM surcharges.
I own ATM Network, an independent ATM company based in Minnesota. For the past 14 years, my company has sold and provided transaction processing for nonbank ATMs; we now have more than 5,000 customers nationwide, including grocery stores, bowling alleys, bars, restaurants, amusement parks, nightclubs, stadiums, retail stores and gas stations.
The case for ATM fees is simple: Without them, most nonbank ATMs wouldn’t exist. ATM owners must buy the machine, maintain it, keep it loaded with cash and paper, provide it with power and a communication link and pay other costs such as insurance and installation. None of this is free. The fees are what make such an investment viable.
This amendment would immediately reduce the number of ATMs available, slash the value of existing investments in ATM equipment, hurt the bottom line of hundreds of thousands of small business owners nationwide and put thousands of entrepreneurs out of business.
The Harkin amendment is promoted as “consumer friendly”, but how do consumers benefit from seeing ATMs disappear from stores, restaurants and gas stations? How does the economy benefit by removing machines that dispense billions of dollars in cash annually — money that drives sales and boosts our economy? How does cutting jobs and hurting small businesses help anyone?
Government intervention in market pricing may be justified when the free market is unable 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. Or they can skip the ATM altogether and pay with credit cards or checks.
With so many alternatives, an ATM surcharge is a purely voluntary payment for convenience. Anyone who doesn’t want to pay the fee can either use an ATM owned by their bank or get cash the old-fashioned way: by standing in line at a teller window. Most consumers don’t want to do that. They have grown up in a world filled with ATMs, and they expect easy access to ATMs. They appreciate the convenience and choice that nonbank ATMs provide. Because of ATM fees, customers can get cash nearly anywhere, at any time. Without the fees, they won’t.
The Harkin amendment would take us 10 steps backward and be disastrous for small businesses across the country. It will hurt the consumers it purports to help and damage our economy just as we’re pulling out of a deep recession. I strongly urge you to oppose this amendment and avoid harm to hundreds of thousands of hardworking American citizens.

Sincerely,

Phil Rock
Founder and President
ATM Network
10749 Bren Rd. E.
Minnetonka, MN 55343

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Write to your senator
You can email your home-state senators, as well as the heads of the Senate Banking Committee, using these links:

Senator Christopher Dodd, Chairman, Senate Banking Committee

Senator Richard Shelby, Ranking member, Senate Banking Commitee

Senator Tom Harkin, amendment sponsor

Senate Banking Commitee

Find your home-state senators

Tags: ATM, atm fees, ATM machines, Cash machine
Posted in Company news, Industry news | 4 Comments »

ATM industry mobilizes to oppose fee cap

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:

That all ATMs are owned by banks or credit unions;
That the only major cost of ATM ownership is the cost of processing a transaction;
That ATM fees are not being properly set by the marketplace.

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.

Tags: ATM, atm fees, ATM machines, Cash machine
Posted in Finance, Industry news | No Comments »

Mastercard raises fees for ATM owners

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.

Tags: ATM, atm fees, ATM machines, Cash machine
Posted in ATM operators, ATM owners, Company news, Finance, Industry news | No Comments »

In midst of recession, ATM use surged

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.

Tags: ATM, ATM machine, ATM machines, ATM Network, ATMs, Cash machine
Posted in ATM benefits, ATM operators, ATM owners, Research | No Comments »