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When it comes to ATMs, the tiny European nation has been a one-game town. The bank-owned ATM network operator, Automatia, had deployed its Otto-branded machines across the country, and were the only ATMs available to Finns and visitors.
But that dynamic began to change in March. That's when Swedish independent sales organization Kontanten entered the market through a partnership with Finland's biggest convenience-store chain, Rautakirja. So far, Kontanten, through Eurocash, has deployed 42 ATMs — the target is to have 50 ATMs installed by the end of the year.
And while the Rautakirja deployment is only expected to include 500 ATMs, Kontanten expects the deal to lead to other retail deployments in the country.
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"We wanted to make our contribution to ensure that there is better access to cash nationwide," said Markuu Pelkonen, Rautakirja's senior vice president of kiosk operations.
EuroCash Finland's chief executive, Harri Koivula, says plans call for an additional 500 of its ATMs at other retail chains, malls and petrol stations over the next two to three years.
"Finnish ATM penetration is the lowest in the whole of Europe, but at the same time, Finns have more cash money than ever. We think that customers need to have easier access to cash," Koivula said.
A track record
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About two years, Kontanten broke the ATM stronghold that banks had in Sweden, after proving that Swedes still love using cash, despite an aggressive push by banks for a cashless society. That same interest in cash is what prompted Kontanten to expand its business model into neighboring Finland.
"Banks want us to believe that we're quickly advancing toward the cashless society," said Kontanten chief executive Gunnar Jacobson. "The truth is, that (cash) has never been so popular."
Kontanten's shake-up of the ATM market in Finland was welcomed by the country's central bank and competition authority, Jacobson says. Now another ISO, Suomen Käteisnosto Oy, is expected to enter the market later this year.
Kettil Stenberg, Finland's CEO for German ATM maker Wincor Nixdorf International, says the shake-up is good, but stresses that the Finnish market can probably make room for only a few ATM players, as the market remains relatively small. Wincor Nixdorf provides ATMs for Kontanten in both Finland and Sweden.
The market to date
Automatia is owned by Finland´s three largest banks — Pohjola, Sampo and Nordea. For the last 15 years, because of the market's relatively small size, Automatia has continually reduced its ATMs in the Otto interbank network.
Finland's ATMs numbers have dropped from 3,018 machines in 1992 to 1,658 at the end of last year, which are almost evenly split between manufacturers NCR Corp. and Wincor Nixdorf. Finland only has 317 ATMs per million people, while the average in Western Europe is approximately 770 ATMs per million, according to Retail Banking Research Ltd.
Market observers say Automatia has cut its network size to improve the per-ATM transaction volume. And since the banks continue to think of their ATM networks as cost centers, as opposed to the profit-center model ISOs hold, cutting the network has made sense for the banking business model.
Companies like Kontanten, however, argue that cash-loving Finns have paid the price for Automatia's ATM reduction in the form of longer ATM lines and spending considerably more time trying to find an ATM.
Automatia is expected to continue reducing its estate by approximately 25 percent by 2010 or 2011, leaving the network at around 1,200 ATMs, according to EuroCash's Koivula.
But the entry of ISOs means the Finnish ATM market is poised to see its first positive change since the downturn that began 15 years ago. Koivula estimates that in the near future the country could have between 2,000 and 2,200 ATMs.
An ATM marketing platform
Kontanten has successfully added a Wincor Nixdorf-based marketing platform to its ATMs in Sweden. Kontanten chief executive Gunnar Jacobson says he expects the offering to be rolled out to the company's ATMs in Finland in the future.
Kontanten now has more than 250 ATMs in Sweden running Wincor Nixdorf's ProSales Marketing software. Since November, the service has attracted newspaper publishers, mobile carriers, service-station operators, banks and retailers.
Kontanten offers two advertising types. Each can display graphically designed messages during idle time or during the 15-second transaction phase reserved for bank-card and PIN authorization.
"Individual ads will normally be displayed for five seconds — long enough to be perceived by consumers but not long enough for users to find them boring or disruptive," says Kontanten marketing director, Patrik Severgardh.
The advertising format also gives the option of disseminating campaigns on a single ATM, a group of systems or the entire network.
"Several retailers have confirmed that sales of the products we advertise have risen by 10 to 20 percent in the retail stores, depending on products or services," Severgardh said.
