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For Dr. Hansup Kwon, change is a good thing. It had better be, for the mild-mannered leader of Tranax Technologies Inc. is banking his company's future on it.

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Kwon is shaking things up by allowing Tranax's core ATM products to be modified with enhanced self-service functionality. Calling his breed of self-service devices "SSTs," Kwon is refocusing the company's market vision and strategically partnering with software and solutions players.

The Fremont, Calif.-based company that found its niche in the entry-level retail ATM space is forging ahead with a plan to become the financial and retail markets' defacto self-service-technology provider.

"The SST market is like the snowball effect," Kwon said to an audience of distributors gathered in Lake Tahoe, Nev., last week. "Once we get in and we demonstrate that it works, then I think everybody will jump in. But I believe, at least at the beginning, it has a higher barrier for entry."

And that's where Tranax, a known leader in the ATM space, has an advantage, Kwon said.

The ATM is arguably the most accepted and widely used self-service instrument, and it undoubtedly accelerated consumer acceptance of other self-service devices such as the grocery self-checkout and the airline self-check-in.

Tranax hosted its annual distributors' conference in Lake Tahoe, Nev. This year marked Tranax's sixth conference.

With more self-service, says Kwon, comes greater consumer demand, especially in the financial-services space. He said the market is more advanced than it was even four or five years ago, and financial institutions and retailers who jump aboard now will quickly attract a loyal following.

"Adoption of the self-service terminal is coming to realization very fast," he said.

Tranax has shipped about 72,000 ATMs in the United States and Canada since it introduced the Mini-Bank 2000 in 1997.

Tossing out what he calls conservative estimates, Kwon said 50 percent of Tranax's business comes from retail ATMs (like the Mini-Bank 1500 and the Mini-Bank c4000), 20 percent from FI-geared ATMs (like the MBS 2500 and 5000), and 30 percent from the company's line of SSTs.

By the end of 2006, Kwon expects that breakdown to shift in favor of more self-service terminals.

But Kwon is being careful not to rock the foundation. He said he doesn't foresee a division between Tranax's self-service and ATM businesses; rather, he sees the two complementing each another.

Tranax's Jeffrey Lee walks through Vero's check-cashing solution, which is displayed above on the Tranax Mini-Bank x4000. The solution includes a biometrics (finger-print) reader.

"We're building a self-service business on top of the ATM (business)," Kwon told distributors. "The ATM is our core competence and our core product. Even though we are marketing the SST, we plan to grow both businesses together."

Tranax has always focused on financial transactions, so offering more advanced financial services - cash dispense, deposit, bill-payment, check-cashing and stored-value dispense - makes sense.

Tranax expects to build the self-service business through its existing domestic network of ATM distributors and banking business partners who sell directly to FIs.

Getting distributors to buy into Tranax's advanced offerings will be key.

Tranax's Bill Dunn told distributors that the company's SST will "ensure stability in a competitive marketplace. It offers another way for ISOs to build revenue."

Distributors like ATM Express Inc., Tranax's No. 1 distributor, believe in Tranax's ability to deliver complex functions.

In a March interview, ATM Express' Neil Clark said, "I have all the confidence that it will work. Hansup Kwon is a smart guy. He understands computers and how equipment can function and needs to function."

The big question for Tranax is whether ISOs will go out and sell those functions.

Bill Dunn explains bill-pay features from Tio Networks available on the TK 1000, which is expected to begin shipping next month.

Some distributors expressed concern that too many functions would complicate the ATM. But while the addition of billpay functionality raised eyebrows, check-cashing received enthusiastic nods from the conference's 100 or so attendees.

"Check-cashing is the single most revenue-building function you can add to your ATM," Vero Inc.'s Joseph Abbo said.

Tranax in September will begin testing Vero's check-cashing solution. The pilot will run on Tranax's new Mini-Bank x4000 and Hybrid Kiosk 3000. The x4000 is the c4000 with a touchscreen built on Microsoft Windows XP instead of Win CE.

"It's the c4000 on steroids," Dunn said. 

A new face to the world

Advanced functions are changing the corporate face of Tranax, but so are movements behind the scenes.

Timeline 1997-98: Tranax enters the off-premise market with the Mini-Bank 2000. Tranax starts marketing the Mini-Bank 1000 and the Mini-Bank 2100. 1999-2000: Tranax markets the Mini-Bank 1000 to the mass ATM market. The Mini-Bank 3000, the first ATM to use a PC platform, hits the market with advanced functions like ticket sales, phone top-ups and check-deposit applications. The Nano Cash is designed to consume the least amount of retail floor space. Today, 80 percent of Nanos on the market are thru-the-wall machines. 2002-03: Tranax intros the Mini-Bank 1500, recognized for its "retail" look and configuration flexibility. The Mini-Bank 2500's large screen is introed as a way for FIs and retailers to promote themselves. 2005-06: The Mini-Bank 2100T hits the market, providing retailers with a secure ATM option.   Tranax markets its new Mini-Bank 4000 as a replacement option for the 2150, 2500 and Triton RL 5000. The Mini-Bank 4000 is the first ATM manufactured by Tranax independent of Nautilus Hyosung. Tranax intros the x4000, the c4000 on XP rather than CE. Tranax intros its Transactional Kiosk and Hybrid Kiosk lines, which include the TK 1000, TK 2000, HK 2000 and HK 3000. The TK 1000 is expected to start shipping next month. The x4000 and HK3000 will be used for check-cashing.

For the last decade, Tranax has marketed ATM products in North America manufactured by Seoul, Korea-based Nautilus Hyosung Inc. But in February, Tranax said it planned to do more on its own.

The distance has allowed Tranax room to expand.

Kwon was reserved when it came to questions about Tranax's relationship with Nautilus Hyosung. He did say, however, that Tranax expects to begin marketing its ATMs and SSTs globally during the first half of 2007. He also said Tranax sees real opportunity for market-share growth in the domestic FI-space - a segment Nautilus Hyosung also is interested in.

The two companies are expected to renegotiate their contract early next year. In the meantime, Tranax will continue marketing the Mini-Bank 1500, which Nautilus Hyosung manufactures.

Tranax is now working with a different Korean tech company, BCI Technology Co. Ltd., for the manufacture of the Mini-Bank 4000 line.

As Tranax moves into the world, Nautilus Hyosung is making inroads to the U.S.

J. Moon, Nautilus Hyosung's head of overseas ATM sales, said in an e-mail that his company is focusing on the global FI market.

"Tranax has a best performance in retail ATM sales; however, they do not have enough career (experience) to sell the FI ATMs," Moon wrote.

With more than 20 years of experience in the Asian FI market, Moon said his company expects to make its mark in the U.S.

"We are developing our own goals and objectives and they (Nautilus Hyosung) are beginning to realize their own goals and objectives, and that's where, sometimes, competing interests exist," Kwon said.

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