When Northrop Grumman Canada Ltd. first conceptualized a kiosk that could double as an ATM with full-motion video and sound in 1999, limitations drove a wedge between theory and reality.

Since then, however, Cambridge, Ontario-based Communiteq Systems Inc. (CSI) has helped bring the idea to market with its Communiteq Automated Monitoring software (CAM).

The two companies inked an agreement under which CSI installs its software in Northrop Grumman-manufactured machines and works as the master world distributor. The result of this collaboration is the Electronic Transaction Machine, or eTM, a hybrid that pairs traditional ATM functionality with a POS debit system.

According to CSI, the Windows NT-based eTM allows users to withdraw cash, purchase goods and services with debit or credit cards, access Web-enabled applications, select coupons and secure information.

"Essentially, the eTM is a PC with ATM functionality," said Irv Donald, CSI vice president. "Anything you can do on a PC, we can do on the eTM."

In one of the more innovative applications that uses debit functionality, which CSI has demonstrated at trade shows, the eTM can be placed in the lobbies of apartment complexes where tenants can withdraw cash, pay rent, place work orders, reserve community rooms and give moving notices.

In the case of a cash withdrawal, the user simply inserts a debit card and enters a PIN. The amount withdrawn is deducted automatically from the consumer's bank account, just as with any other ATM. The customer also uses a debit card to pay rent, but the money is forwarded directly to the property management company's account. A receipt accompanies all transactions.

"An e-mail is generated by the machine and sent to the property management company (when a transaction is completed)," Donald said. "If the user pays rent, it's set up to pay the property management company directly. So the property management company then gets its money the next day, without associated credit card costs."

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In addition, the eTM supports advertising, Donald said. Its remote management system allows ATM owners to schedule different ads to run at different times of the day. So, Donald pointed out, an ad for doughnuts could be featured in the morning while fast food steals the show at lunchtime.

"The customer can take the ad that they want and make the ad an attachment to an e-mail," he explained. "They send the e-mail to the eTM, and in the body of the e-mail they say what date and time and what place on the screen they want the ad to run. The machine dials in regularly to our CAM server, picks up the e-mail, inserts it in the database and then sends back an e-mail to the originator to say 'I've done it.'"

The CAM software also allows for on-the-spot trouble shooting. For example, if a bill is stuck in the cash dispenser, an e-mail is sent to the eTM manager. Meanwhile, the CAM software automatically requests an attempt to clear the jam. The eTM manager is then paged within two minutes and told whether the jam cleared.

Currently, there is no leasing option with the eTM, which carries a price tag of U.S. $8,500. The unit comes with a one-year parts warranty.

If something goes awry, Donald said, "You simply do a replacement. The machine's completely modular, so you don't do any on-site repairs. If there's a problem, we ship out a new one and they ship the old one back."

In the case of a failure, the eTM keeps backup transaction records on disc. "Proactively, we're hearing from machines so that we stop problems," Donald said. "But, on the other hand, if a problem does happen we can fix it quickly."

To meet the regulatory requirements of Canada's national financial network, Interac, CSI needed the expertise of an outside source to bring the eTM online. Enter Oakville, Ontario-based TCS Limited, a software developer, integrator and consultant specializing in financial delivery systems and services. TCS, which drives over 5,000 banking machines in Canada, worked with CSI to make sure the eTM was compatible with Canada's switches.

"We had to make sure it was certified and test it against our switch," said TCS Vice President George Oliver. "We shared the project message specification that we use for terminals coming into our network on a dial basis, and we helped test this eTM solution."

Northrop Grumman's eTM was already certified with the TCS network as a cash machine, Oliver said. "What (CSI) was able to do was extend the solution inside of that machine by adding to it the kind of hardware that Interac mandates for debit/point of sale."

The eTM's advanced technology may give deployers an edge. Lamar Wingate, president of B.E.S.T. Retail Solutions, Inc., based in Cambridge, Ontario, Canada, has purchased and deployed six eTMs this year.

"Our clients include a major mall in London, Ontario, and a high-traffic convenience store in Toronto," Wingate said. "The response that we have gotten from the mall is one of excitement and appreciation that we are providing this platform which, in their opinion, shows their merchants and customers that they are providing the latest in technology -- and therefore are being very progressive."

Wingate said his company has been asked by a major retailer to develop a gift registry where the customer can pay for the item at the eTM. He also has been approached by several large property management companies in Toronto that are interested in the rent payment application, he said.

"I have been able to approach many corporate contacts that were not very interested in deploying ATMs with the prospect of simply dispensing cash, and have seen these prospects demonstrate a renewed interest in this enhanced eTM technology," Wingate claimed.

Based on trial runs, Donald expects to see innovative uses of the eTM in the future.

"We've been able to do a number of very special applications that do debit, do credit and can sell things," he said. "We've been able to put a mall directory on there where you can zoom down and get full-motion video at the floor level and get coupons for that store. The eTM is absolutely unique, we believe, in the marketplace."

While there currently are close to 100 eTMs on the market in Canada, Donald said CSI has received orders for an additional 300 to 400 machines. These units will be deployed over the next eight months, he said.