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Y2K will almost certainly cause headaches for some. But anxiety over the impending millennium is actually easing Portland, Ore.-based TRM Corp.'s entry into the burgeoning off-site ATM business in the UK. In an effort to reduce technology snafus, the Link Network, the UK's national shared ATM network, is halting any major new ATM deployment until after the first of the year. According to Link rules, new entrants to the UK market must be sponsored by a British financial institution. So, TRM Corp. President and CEO Fred Stockton said, "If you weren't a participant by August of 1999, you're not going to be able to enter the business until sometime after January of 2000." By partnering with the British bank Woolwich plc, TRM has become one of only a handful of independents that are ready, willing and able to deploy in the UK as soon as Y2K blows over. Stockton foresees some interesting challenges in the UK market, which has been dominated to date by perhaps two dozen big banks. Since Link rules require all machines to be bank-branded, Stockton said there is a heightened sensitivity to brand protection. "The product has to maintain the integrity and reputation of the bank," he said. Because TRM has been installing copy machines at retail locations in the UK since 1992, the company already has management staff and a sales and service force in place. TRM's self-service copy centers are at 6,500 sites. "We're in a unique position to really leverage that existing infrastructure," Stockton said. That strategy worked in the U.S., where TRM made a high-profile deal last January to deploy up to 1,100 ATMs in The Pantry convenience stores. Not bad for a company that didn't enter the ATM business until the first quarter of 1998. After attracting a $20 million equity investment and hiring off-site veteran Kurt Schusterman to run its new ATM division, TRM planned to buy an ISO. However, Stockton said, the company turned up few attractive acquisition prospects. "There are a lot of sales and marketing organizations from the POS industry running around selling to retailers. Once the units are sold, the service capabilities of a lot of these companies are extremely weak, in my opinion," he said. Instead, TRM chose to rely largely on its own employees. A year later, with The Pantry contract under its belt, TRM decided to explore the international market. After looking at Canada and finding it "a pretty difficult market," Stockton said the focus shifted to the UK. With plans to deploy up to 1,500 NCR machines in the UK by the end of 2000, TRM will do virtually all of its own service, outsourcing only a small portion to NCR. An existing service infrastructure is likely to be an even more important advantage overseas than it was in the U.S., Stockton opined. "It's not as entrepreneurial an environment over there," he said. "There aren't as many opportunities to hire third-party providers for service as most of the ISOs in the U.S. have done in their initial entry into the market."
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