This article appeared in the ATM & Financial Self-Service Executive Summary, Spring 2006.

Tranax Technologies Inc. has a new vision for the future -- one that includes self-service beyond the ATM.

The Fremont, Calif.-based company showed off its newest addition, the MB c4000, at the February ATM Industry Association (ATMIA) East conference.

The self-service terminal is unique for a couple of reasons: It represents a convergence of ATM and advanced self-service functionality, and it's a machine that Tranax is manufacturing independent of Seoul, Korea-based Nautilus Hyosung Inc.

Tranax entered the off-premise ATM space in 1997 with the Mini-Bank 2000, an ATM manufactured by Nautilus Hyosung and sold by Tranax. In North America, the relationship afforded Tranax the ability to provide its customers with ATM support and services.

Now that Tranax is branching out into more advanced functions, its executives say it needs more control at home.

"When you've got more going on at the ATM - more than simply cash dispensing -- the hardware becomes more complex," said Bill Dunn, Tranax's vice president of sales. "The self-service equipment is more complex, and we needed to have the ability to react and do enhancements with quick turnaround time."

No surprises

Simply, Dunn said: "Tranax made a decision to manufacture things above and beyond what Hyosung could do for us."

Some manufacturing will continue in Korea, "at least for the time being," Dunn wrote in an e-mail to ATMmarketplace. "We are in the process of moving into a new facility that will almost double our space and will allow for more of the manufacturing to be done here."

But the decision to do more at home didn't surprise most in the industry.

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Neil Clark, vice president of sales for Billings, Mont.-based ATM Express Inc., Tranax's No. 1 ATM distributor, has worked with Tranax since 1999. Clark said the relationship with Nautilus Hyosung hindered Tranax, and a severance of sorts was expected.

"This move puts them in control, and I think it will be good for them," he said. "They can react faster now to market changes."

Joe Harris, general manager of Hamburg, N.Y.-based ANS Marketing LLC, another Tranax distributor, said Tranax's ability to quickly react to customers' and partners' needs will have a huge impact, especially where new functionality is concerned.

As an example, Harris pointed to Tranax's check-cashing solution -- a solution developed by Portland, Ore.-based Vero Inc. At ATMIA East, Vero and Tranax announced a partnership to provide check-cashing functionality on the c4000.

"The newness of the check-cashing solution, for instance, is an interesting point to consider," Harris said. "The fact that they'll be creating that and manufacturing it here will allow them to do any adjustments or tweaking needed in order to get it to work the way they want it to. With check-cashing, you're going to be fine-tuning it in order to get it to work in the field."

For a piece of equipment that typically costs between $20,000 and $30,000, distributors and customers want to know that support and parts are close to home, he said.

"When you make an investment in equipment like that, you expect it to work a certain way. And if you have to wait for something from South Korea, that's not going to sit well with anyone who has invested that type of money."

Bringing it all together

Jeffrey Lee, Tranax's director of sales for self-service products, said "Enhancement is why we're doing our own manufacturing."

Like Harris, Lee said Tranax's check-cashing and advanced self-service functionality require more attention from a software perspective -- an area in which Tranax expects to excel.

"The two have to be together -- software and hardware," Dunn said. "As a hardware supplier, you have to understand software. Dr. Hansup Kwon has a doctorate in computer and electrical engineering, and he understands how to make a piece of hardware work with a piece of software."

Through its partnerships with Vero, Livewire International Inc., Financial Payment Systems and Info Touch Technologies Corp., Tranax is honing in on self-service beyond cash dispensing, Dunn said.

And what of the relationship with Nautilus Hyosung?

No one at Nautilus Hyosung could be reached for comment, but Dunn said Tranax's relationship with the company is not expected to change.

"The Mini-Bank 1500 is manufactured by Hyosung, and that's still our business. It's a partnership we both dearly enjoy having," he said. "There are rumors in the industry that we're mad at them or that we're replacing them, and that's just not true. The major portion of our business right now comes from that relationship with Hyosung, and we don't see that side of the business going down. We see it continuing to grow with the self-service terminal business."

A move forward

Tranax decided more than a year ago to branch out into an area where Nautilus Hyosung doesn't exist.

"This has been an evolutionary thing," Dunn said. "Tranax made a decision to manufacture things above and beyond what Hyosung could do for us."

Tranax's products are now divided into two categories, Dunn said: One for ATM enhancements, which includes the retail ATM business with Nautilus Hyosung, and one for self-service terminals or kiosks that don't interface with the ATM.

He added that Tranax is securing its place in a self-service/kiosk market that is expected to grow 9 percent over the next two years, more than double the projected growth for the ATM market.

"In the very near future (the next 24 months), we probably will be saying 50 percent of our business is self-service terminals," Dunn said. "I think that will be the driving force in our business, surpassing the retail ATM side of the business.

"There's a lot of buzz in the marketplace, and if the buzz translates into production, it will be a very short time."