• KAL unveils cashless ATM

KAL unveils cashless ATM

Of all the day-to-day issues confronting the FI or ISO operating an ATM fleet, the most confounding are those that deal with the costs of cash.

There's the cost of moving it, managing it, keeping it safe from fraudsters, hackers and creative criminals with tow straps and pickup trucks.

There's just one way to address all of those costs at once: Get rid of the cash. But then, what's the point of the ATM, right?

Aravinda Korala, CEO of KAL ATM Software, believes he has struck upon the answer to that conundrum. Today in Times Square, his company will debut its cashless Retail Teller Machine — or RTM — for hands-on trial by some of the world's toughest critics — New Yorkers.

Just like a regular ATM — only different

Anyone familiar with the early days of ATMs in the U.S. and the use of "scrip" will understand the cashless concept behind the KAL RTM. As with scrip, the RTM user requests a certain amount of cash at the machine, receives a voucher (scrip) and presents the voucher to a cashier for fulfilment.

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However, where the similarities between scrip and RTMs begin, they also end, said Korala; what takes the RTM a quantum leap past scrip is what is happening in the background when the user requests a cash withdrawal.

"The RTM does a deposit transaction and puts money directly into the retailer's bank account," he said. "So 'Steve' goes in to the RTM, does a $100 transaction; money comes out of Steve's account and it goes into the acquirer bank's account. Simultaneously, the acquiring bank puts money into the retailer's bank account."

Deposits are transacted similarly. And, Korala said, the RTM does much more besides. "We are going with this to be a complete bank teller machine. Because this can do dispense, this can do deposit, this can do balance inquiry, this can do bill pay, this can do your whole kind of banking thing." The RTM can even offer video conferencing with a teller using the unit's 17-inch onboard liquid crystal display or an attached video topper, Korala said. And because it runs on the same KAL software that runs ATMs, the RTM interfaces with the bank's network like any other machine.

For FIs, a bigger footprint at a smaller cost

The RTM was conceived by KAL as a means for banks to expand their footprint across a geographic area simply, rapidly and at significantly less cost than with a fleet of ATMs — to be exact, Korala said, at one-tenth the typical cost of operating an ATM for a year.

Initially, KAL expected the RTM to generate the most interest in developing countries such as India and China, where governments are pushing hard to move banking services into un- and underbanked areas. And while this has been true, Korala said, the RTM also has excited interest in developed countries where banks see it as a potential difference-maker in a very competitive marketplace.

"Last week I was in Japan and I presented to Japanese banks and they said, 'Wow, you mean for the same price that I'm spending on my ATM network, I can have ten times as many ATMs doing exactly the same transactions? … So you mean I can have this in every hotel and every restaurant and every … '" said Korala. "Absolutely; that's the concept."

The RTM offers benefits to merchants, as well, said Korala. Most obviously, it can attract additional foot traffic into a store. And for businesses such as convenience stores and sandwich shops that do a lot of cash transactions, the scrip function allows the retailer to move cash from till to bank account without an actual trip to the bank. Finally, the RTM allows the merchant to provide cash to customers without having to do it as a cash-out transaction — which requires the customer to make a purchase and the merchant to pay a card fee. Also worth mentioning: It comes EMV enabled.

A step forward, but not a departure

Though the RTM is something of a departure for KAL, it doesn't mean the 23-year-old software company is suddenly "changing its spots," Korala said. "[W]e've got a patent on this [globally] and we are going to license the patent as well as the hardware design … and we've decided that we need to build our own RTMs to begin with at least to make sure that we seed the market. But we're not going to become like NCR and Diebold; we're going to license it to anyone who wants to build it."

Learn more about the Retail Teller Machine concept:

For more on this topic, visit the bank automation research center.

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User Comments – Give us your opinion!
  • Ed Dedelioglu
    Don't credit card machines do the same/similar job, except non monetary transactions?
  • Jeff Mckay
    My old script machines of 20 years ago did virtually the same thing. This is not new technology, just promoted as different. That said, it is still a great concept that still works even in today's market.

    Jeff McKay
  • Mark Porter
    First National Bank in South Africa started rolling out similar terminals more than 10 years ago. The system also credit the merchant's account and debits the cardholder. The software and hardware is provided by Itiam.com
  • Gerardo Jauregui puertas
    Isn´t it the same as kiosks? I think is a good idea but not a new one
  • Dan Lacelle
    Is this not just a way for the banks and ATM companies to pass the liability onto the merchant? Now instead of having to load cash into the ATM they expect the retailer to have more cash on hand to provide redemption of the voucher. What is an easier target to a criminal? Tough sell in my opinion.
  • David Dobbels
    I thought Visa and Mastercard did not allow these cashless ATM's / Scrip devices to operate.
  • Sisworo Triatmoko
    In the age of ever increasing credit card and debit card usage, how do you expect establishments to maintain cash available to give to customers that have used the RTM to withdraw cash? What happens if the customer uses the RTM to withdraw $100 only to find out that the cashier doesn't have the cash available? Transactions can be reversed, but customer's disappointment may not.
    Has KAL done a survey to measure establishment's willingness to accept cash deposits from bank customers, as the more money the establishments store, the higher the risk of robbery? Wouldn't it contradict convenience store policy to maintain a low amount of cash in cash registers?
  • Jorge Fernandez
    The card associations and most of the US networks prohibited Scrips back in the late 90s. Triton and Lipman both had excellent solutions that did not sell because of the regulations. They are treated as POS devices and pay interchange and discount fees on the transactions. Wondering what the "new twist" is.
  • ben hall
    20yrs ago put a verifone 490 with a p250 or r900 printer in a plastic box and and put it on a stand to look like a atm..it was a scrip machine ..made the unit myself had about 200 of them in locations..until visa and mc said no no you cant do that..then triton came out with the 9500...changed everything...a lot of issues with the location keeping enough cash...they did not like it most put a $20.00 to $40.00 limit...with a atms so cheap...if a location is doing much business with a scrip..he might as well do a atm...15yrs ago i bought 10 triton 9500 and i am still in the business today...scrip machines a tough sell...a niche market...also what is the cost of one....whats the payback? there is a small market...but whats the profit? bennie hall
  • Aravinda Korala
    “Ed Dedelioglua: Don't credit card machines do the same/similar job?”
    If you mean a POS machine in a shop – no they don’t. A POS machine allows you to buy something in a shop. The RTM allows you to get cash from your bank account and then leave the shop without buying anything – if that is what you wish to do.

    “Jeff McKay: RTMs are like script machines”
    Yes to some extent. But it is like saying an iPAD is like a phone because you can make a call with it. There are some similarities – but many more differences.

    “Mark Porter: ITIAM”
    Yes some similarities and many differences too.

    Gerardo Jauregui Puertas: “Same as kiosks?”
    Yes similar, but kiosks cannot do cash dispense transactions.

    Dan Lacelleabout: “..the retailer to have more cash on hand to provide redemption of the voucher”
    Quite the opposite – this takes cash off the retailer’s hands and reduces the cash in the store. If the demand for cash is more than the store’s daily cash intake, the retailer can decide whether to simply shut down the machine when the store does not have enough cash, or accept deposits too, so that he can balance the cash intake with the going out cash.

    Sisworo Triatmoko: “What happens if there isn’t cash, etc.”
    As above – simply turn off the machine. Same as what happens if you go to a store to buy bananas and there’s none left. You would have an unhappy customer. It is up to the retailer to decide how to manage the demand. On balance, the RTM results in less cash held in the store.

    Various: “like a scrip machine..”
    Yes there are similarities, but many differences too…
  • tom timy
    credit card hocked to a mobil will be intresting -
    what is the idea that is hidden under the crea tive
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