As with any pilot of new ATM functionality, particularly one with a tight-lipped retail partner, no one is saying just how many money orders have been purchased at three Diebold ATMs in New Orleans over the past nine months.

But it isn't because they don't want to.

"It has wildly exceeded our expectations," said Tonya Myers-Jordan, Diebold's director of business development. "The amount of transactions that we've encountered is four times greater than we anticipated."

"The results have been very positive so far. Sales have been very, very good," agreed Ann Jackson, vice president of product development for Travelers Express, Diebold's partner in the project.

The test went live on Oct. 1 at three locations of a major discount chain -- one which just earned the top spot on Fortune's list of the world's top 500 retailers -- and will continue through at least Sept. 30. Discussions on possible expansion of the program are expected to begin next month.

The Diebold 1062ixs are outfitted with an additional printer, cash acceptor (to allow those without bank cards to purchase money orders) and coin dispenser. Myers-Jordan said the machines also feature audio prompts that guide consumers step by step through the unfamiliar money order transaction. Though the audio was installed almost as an afterthought, she said it's been popular with consumers.

"We're finding that they're listening to the audio instructions more than they are looking at what's going on at the terminal," she said.

They like it! Hey, Mikey!

During the first few weeks of the pilot, representatives from Travelers Express handed out pamphlets and conducted some demonstrations to show consumers how the transaction was done. Though that was the only advertising of the service, Jackson said money orders at the ATM ramped up about as quickly as money orders typically do at the service counter. Both Diebold and Travelers Express think the customer adoption rate would be higher if the service was better advertised, however.

Money order sales at Diebold 1062ix ATMs like this one have exceeded original expectations in a 9-month pilot at three retail locations in New Orleans.

A bonus in the pilot: "(The retailer's) money order pricing is very competitive," Jackson said.

Consumers seem to prefer the ATM to the counter, Jackson said. In particular, they like the shorter lines and longer service hours at the ATM. "While more and more stores are open 24 hours, the service counters generally aren't. And the lines can get quite long, because they sell all kinds of products there," she said.

Jackson believes that trust also plays a part in consumer acceptance. "I think the customer feels good knowing they can go to (the retailer) if there is a problem with the transaction, and (the retailer) will make it right," she said.

The three ATMs are located in high-profile spots within the stores, two of them just inside the front entrance and another near the checkout lane.

Ready for prime time

According to Myers-Jordan, the average time required to complete a money order transaction is about 30 seconds, slightly longer if a customer buys more than one money order. The addition of money orders hasn't made a discernible impact on standard ATM transactions, she added.

Diebold opted for money orders because the manufacturer felt that the transaction was less technologically complex and thus more "ready for prime time" than some of the other advanced function options and also seemed to generate the most interest among its potential retail partners.

Speed to market was also accelerated by Diebold's decision to drive the three terminals, Myers-Jordan said.

"We took the attitude that advanced functionality wasn't occurring fast enough, and we made a concerted decision to try to break down a lot of the barriers," she said. "We thought one way to do that was to drive the terminals ourselves."

While Travelers Express is interested in offering other advanced transactions at ATMs -- and has inked a deal with Concord EFS to offer MoneyGram money transfer services at ATMs in the Star network -- Jackson thinks that after the dust has cleared and pilots have ended, only a handful of large players will offer these kinds of services.

Picking the right partners will be a key to success in the real world, she said.

"You don't want to waste research and development money on someone who's not going to be around in a year or two," she said. "We're pretty open to investigating possibilities on the business side. But when it comes to the actual IT development, you have to choose carefully. Otherwise, you'd be doing nothing but designing interfaces and doing pilots."

Despite the success of the money order pilot, Jackson believes additional services must be added to help defray the high costs of the hardware -- peripherals like cash acceptors and additional printers aren't cheap.

"As more and more of these kinds of terminals are deployed, I think the costs will come down, but I think you'll need at least three or four products to make it a profitable model," she said, noting that costs of program management also tend to rise with expenditures like additional vault cash.

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