After several years of squeezing out production costs to offer inexpensive ATMs, major retail-oriented manufacturers are moving in a new direction -- rolling out new PC-based models that they say are better equipped to offer advanced function transactions such as check cashing and money transfer.

(See related story PC-based ATMs have big presence at NACS 2003)

Mike Stevenson, president of WRG Services, is convinced they're going the wrong way.

Stevenson said the concept of increased functionality is generating lots of buzz -- but few if any sales. "Everybody is saying they want advanced functionality, but when it comes time to buy they're buying on price."

To give the market what Stevenson said it really wants -- "a machine with quality components that works all of the time and is $1,000 less than anything else in the marketplace" -- WRG is introducing the Genesis, a Verifone-based unit with a sub-$2,000 wholesale price tag.

The market is "very price sensitive," agreed Rob McConnell, president of ATM Systems, a Syracuse, N.Y.-based WRG distributor with about 300 ATMs under contract.

"Merchants have heard about all of these wonderful things that ATMs can do, and they'll ask 'Can a machine do this, can it do that?' But it ultimately comes down to how much it costs," McConnell said. "When you walk them through how much profit they'll actually make on something like stamps or phone top-ups, they go for the less expensive machine every time."

WRG's new Genesis ATM

Stevenson tasked Jason Kuhn, WRG's general manager, with building the Genesis. Kuhn spent more than a year filled with anxious moments researching components. "I knew a could make a machine at the right price point -- but it wouldn't necessarily work. Our service department would have killed me," he explained.

Kuhn opted for a 1,000-note Puloon dispenser -- with some misgivings. However, his initial concerns about performance dissipated after a WRG distributor tested a Puloon dispenser in several machines at the New York State Fair -- some of which cranked out as many as 15,000 transactions in 12 days.

While the Puloon dispenser is standard on the Genesis, both the more familiar De La Rue Mini-Mech and SDD are offered as options, Kuhn said.

Another cost-saving component offered as a standard feature on the Genesis is a Sargent & Greenleaf spin dial lock (with an electronic lock as an option). The unit comes equipped with WRG's basic remote monitoring software; a more robust version called Termon that allows for remote machine diagnostics, status inquiries and activity reports is available.

Kuhn said the Verifone 490 CPU that powers the Genesis is completely reworked, with the addition of several proprietary WRG components. WRG invested a considerable amount of time and money into making the unit Triple DES compliant, he said.

One of the most notable changes from WRG's Fast Cash, the company's original Verifone-based ATM, is the sleeker look of the Genesis, which has a curvier shape and a keypad integrated into the fascia. WRG paid attention to small details, Kuhn said, such as coating the casing of the Verifone unit to match the plastic of the ATM's cabinet.

"The biggest knock against the Fast Cash was its appearance," Kuhn said. "If you put down a flier with the Fast Cash and a competitor's product, the Fast Cash would lose the beauty contest every time."

The Genesis, which will begin rolling off production lines this month, will replace the Fast Cash. WRG will continue to manufacture its Vision 100, a higher-end unit based around a Hypercom ICE CPU.

"We're going to keep the Vision because you need a higher-end offering, but the Genesis will be our bread-and-butter machine moving forward," said Stevenson, who predicted that the Genesis will account for 80 percent of WRG's future sales.

McConnell believes the Genesis will appeal to mom-and-pop locations that generate monthly transactions in the high two-digit range -- although those merchants may require a slightly more involved sales pitch.

"These are people who haven't already been sold an ATM, so it's almost like going back seven years and educating them on the value an ATM can bring to their business," he said.

There is room in the market for both the new, more costly PC-based ATMs and machines like the Genesis, McConnell said.

"Let's face it. Probably 99.9 percent of the really good locations are gone," he said. "I think the PC-based machines make sense to replace some of the existing hardware at those locations. The Genesis will help open up the market on the lower end."

WRG has also created an in-house leasing program for its top distributors, Stevenson said. "Every deal that comes across will be approved. We'll ship out the machine and take the monthly payments from the residual."