Cardtronics Inc. recently announced another bank branding agreement with San Antonio-based USAA Federal Savings Bank. Since announcing its first branding partner, PNC Bank, in 2005, Cardtronics has signed agreements with eight of the top 15 financial institutions by assets in the U.S.
Bank-branded ATMs have been growing in popularity since the inception of such programs a little fewer than 10 years ago. The last two years have seen a boom with companies such as Louisville, Ky.-based Payment Alliance International (PAI) and Houston-based Cardtronics signing more agreements.
As a result of Cardtronics' agreement with USAA, a provider of financial services for military families, 189 Cardtronics-owned and operated ATMs in the metro Washington, D.C. area now feature the USAA brand and offer fee-free cash access to USAA members.
“By utilizing both our Allpoint Network for surcharge-free ATM cash access and our strategically placed D.C. area ATMs to enhance market presence, USAA has illustrated the dual role that Cardtronics can play in cost-effectively helping a financial institution achieve ubiquitous status for both its brand and surcharge-free ATMs,” said Rick Updyke, president, U.S. Business Group, Cardtronics.
All 189 Cardtronics-owned/USAA-branded ATMs are located in Washington, D.C. area CVS/pharmacy locations. In addition to this ATM branding agreement, USAA has participated in the Allpoint Network since 2009. The Allpoint Network is a Cardtronics affiliate and the nation’s largest surcharge-free ATM network.
The benefits of bank-branded ATM agreements are becoming increasingly attractive to FIs, especially in the wake of one of the worst economic climates in U.S. history.
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Economical approach to expanding ATM fleet
Most ATM branding relationships involve a financial institution contracting with a deployer for the right to place its brand on the exterior and screen of a deployer's ATM, as well as to give its customers surcharge-free access at that ATM.
"I think the branding model itself is growing in popularity, and I think some of that is the economic climate we've been operating in. Banks are looking for low cost ways to increase their ATM fleet. I think it's been demonstrated in the marketplace that the branding model works by the number of banks that have branding arrangements today,"
said Keith Myers, senior vice president of Financial Services, PAI.
A financial institution can extend both the reach and visibility of its brand without the capital expenditure of purchasing and placing additional bank or credit union-owned ATMs. IADs also typically handle cash replenishment, service and maintenance of the machines.
PAI kicked off its bank branding push about a year ago, after seeing an improving market for it in the past three to four years. Its portfolio now consists of more than 15 agreements with FIs.
Cardtronics has agreements with BB&T, Chase, Citi, HSBC, Huntington, PNC and Sovereign banks, among others, according to Nick Pappathopoulos, director of public relations, Cardtronics. The company announced its first branding agreement with PNC Bank of Pittsburgh in 2005.
Financial institution brands can be found on more than 12,000 retail-located, Cardtronics-owned ATMs. Popular merchant locations include Target and Walgreens.
Additionally, the merchants housing bank-branded ATMs arguably will benefit from increased foot-traffic as ATM branding partners educate their cardholders about surcharge-free ATM cash access at the branded cash machine locations.
Creating brand awareness, customer convenience
When thinking about the physical ATM, it's an opportunity for a mini billboard for the bank or credit union to advertise to customers and passers-by in the merchant location.
Another benefit of generating visibility is attracting and retaining cardholders with convenient access, said Myers.
"It's a great strategy to attract new deposit accounts because it demonstrates how cardholders would have convenient access to surcharge-free machines. It's a win-win situation because banks can use that to promote brand awareness," Myers said.
