Article
A look back at the best and worst of 2009
The ATM industry merged, acquired and buckled down during this year's recession and emerged with a stronger focus on core products and services.
SEE INDUSTRY FEEDBACK AT THE BOTTOM OF THIS STORY ...
The last year has been eventful for the ATM industry. From the seemingly sudden decision fromNCR Corp. to move its base of more than 100 years from Ohio to Georgia to the eventual collapse of the much-touted and anticipated acquisition of United States retail ATM manufacturerTriton Systems of Delaware Inc.by Korea-basedNautilus Hyosung, I look back on 2009 with a little relief. We've come a long way, and it appears that 2010 will be a year for the industry to use some of the progress it's made for improvement.
After reflection and a scan of the year's story archives, I've listed the top five best occurrences and the one greatest let-down. Even then, I have to acknowledge that some positive things have come from that so-called worst event. So, let's take a look.
No. 1 on my list of the top-five best things to happen in 2009 is NCR Corp.'s move to Atlanta. I admit that when thestory broke in June, I was a bit skeptical. Who just picks up and moves the corporate headquarters of a multibillion dollar company from one state to another, especially after more than 100 years? There had to be something rotten or awry, I insisted to myself.
But I see the move as a positive, and here is why: The state of Georgia and the city of Columbus, Ga., where the company's 340,000-square-foot manufacturing facility for the SelfServ ATM line is located, gave NCR a number of financial incentives to relocate. And companies like NCR need to look for incentives.
The move also benefits Georgia, since the facility expects to employ more than800 people, once it reaches capacity.And here's the other thing that makes the move cool and significant: It signifies NCR's commitment to bringing the manufacture of its ATM line back in-house, in the United States. It means an end to so much outsourcing, and that's a good thing for the industry and the end-user, i.e., NCR's financial-institution customers.
No. 2 on my list: Therebranding of TRM Corp. to Access to Money, following TRM's April 2008acquisition of Access to Money. Each of these independent ATM deployers had a lot to offer the other — TRM's portfolio and locations, Access to Money's reputation and savvy to manage and operate high-transacting and profitable ATMs.
Let's face it. TRM was struggling, and had been for quite some time. Frankly, I don't know how the company was able to keep itself afloat for so long. To its credit, in 2008, TRM managed to trim some fat, make some executive shifts at the top and regain a focus that had been blurred after years of spreading its business far too thin. All those years of financial struggle really hurt the brand's reputation. By taking on the Access to Money name, the one-time ATM giant is able to take another shot at greatness.
Following the June 2009 announcement to rebrand, TRM president and CEO Richard Stern said:
"This is the final step in the long transition process associated with our acquisition of Access to Money. While the TRM name had been associated with leadership in the ATM industry in its early days, we believe that the name Access to Money not only describes our primary service, but is also readily identifiable with our business of distributing and servicing ATM machines. Our new name provides us with a great opportunity to rebrand the company with the name associated with our operational excellence and industry leadership."
No. 3:Diebold Inc.'sfocus on integrated services. In April, Diebold invited a host of journalists and industry analysts to its headquarters in North Canton, Ohio. The purpose was to announce a shift in the company's focus from products to services. After 150 years, the move marked a significant shift and a trend that is being seen throughout the industry.
Germany-based Wincor Nixdorf AG also has spent the last few years focusing greater attention on outsourced services, especially in the United States, where the company's service coverage has been relatively weak (when compared with NCR and Diebold).
Diebold CEO Tom Swidarski told journalists and industry analysts in April that Diebold expects to evolve into a company that is more focused on services than hardware. For the last five years, the company has striven to reach the nearly 50-50 revenue mix it now has between products and services. Over the next five years, Diebold will push to hit a 75-25 revenue mix of services and products, respectively.
2010 will mark a year of continual ATM replacement and upgrade, as FIs the world over continue their migration to automated ATM deposits, cash recycling and mobile-device interaction with the ATM. Once those upgrades ramp up, over the next five years, the replacement cycle won't occur quite so frequently. These new, hyper ATMs are expensive, high-tech and easy to upgrade based on modular designs. Bankers aren't going to replace them in the future; rather, they're going to upgrade them.
What that means for ATM manufacturers such as Diebold is that solely relying on products for revenue, beyond sales in emerging/developing markets, is corporate suicide. An opportunity, however, lies in the complexity of this new hardware. Bankers can't afford to service these ATMs, nor do they want to. They'd much rather rely on the experts, and that's where outsourced, integrated services come in.
No. 4:Canada's nearly complete migration to EMV. Will the United States ever get the clue? Canada's completion of the migration to the Europay, MasterCard, Visa standard, which admittedly will take a few more years, is going to rock the United States card market. The advanced security of chip-and-PIN technology already is pushing more fraud to the United States, where the feeble and inferior magnetic stripe still reigns.
At the moment, U.S. FIs don't have a great deal of incentive to make the shift from mag stripe to EMV. Coupled with a perceived lack of fraud is the fact that EMV/chip technology also has not lived up to its full potential, where the storing of additional information such as biometric or additional account details is concerned.
Some experts in Canada, such as Wendy Macpherson of Interac, Canada's payments association, say U.S. FIs may have bigger worries than they think.
"I think that one reason the U.S. has not moved to EMV is that the financial institutions there might not have a good handle on exactly how much fraud there is," she said. "Because the country has so many small FIs, and so many FIs overall, it's hard to really have a handle on what's going on everywhere."
And No. 5 on my list of the best stories of 2009 is Global Axcess' (dba Nationwide Money Services') decision tobreak into the DVD-rental kiosk business.I know having a focus on a core competency is critical, but if anyone can pull off a shift toward a new, yet complementary, business market, it's George McQuain, GAXC's CEO. I've watched George turn GAXC around, pulling the once-struggling ISO from the depths of debt and imminent death to profitability and a company with vision.
McQuain in September told ATMmarketplace.com that the decision to move into the DVD space really isn't that much of a business leap. However, he argues that getting into the DVD-kiosk business has more nuances than most ATM deployers appreciate. Besides, self-service DVD rentals have been tried and proven. They work. Self-service financial services, such as check cashing and billpay, however, are still hit or miss in the market. "The business model for DVD rental is very similar to today's ATM-placement model, McQuain said. "You've got the cost of the machine and the cost of getting that machine installed. You've got the cost of the inventory, which corresponds to cost of cash. And then you have maintenance and the cost to conduct the transaction."
The worst
So what made the worst story of 2009? Thecollapse of the acquisition deal between Nautilus Hyosung and Triton.
If these two companies had joined forces, they would have created a powerhouse in the retail ATM space. Triton, a dominant and well-respected brand in the United States, and Nautilus, which is pushing to make a stronghold in the U.S. retail and financial markets — the companies could have made some waves. But concerns about anindustry monopolyby the Department of Justice led the two entities to sever their ties and call off the $63 million deal.
James Phillips, director of North American sales for Triton, said at the time that both companies had been going through the antitrust review with the DOJ and just decided to walk away.
"It looked like impediments with the DOJ were going to continue on, and it was better to just stop and go our separate ways," Phillips said.
Phillips said that had it gone through, the acquisition would have made an impact on a global scale.
"Nautilus and Triton are very strong in certain markets globally," he said. "I think there was some good synergy to be had on a worldwide basis in various markets overseas. Certainly in the U.S. there would have been some synergies on the financial equipment side and on the retail ATM side, also."
But all stories have two sides, and some positives did emerge from this let-down. First, had the acquisition gone through, it likely would have meant the end ofTranax Technologies Inc., which once distributed ATMs in the United States for Nautilus Hyosung. Tranax would not have been able to compete with the Triton-Nautilus powerhouse. And having diversity in the market keeps everybody honest.
Also, since the deal's collapse, Triton has opened a new servicing arm,ATMGurus, andreinstated its focus on the retail ATM market. I see both decisions as positives, not only for Triton but for the industry overall.
INDUSTRY FEEDBACK Looking back on the year 2009: It started with ...
2009 was a radical year for a lot of industries and a lot of companies. I look at 2009 as a year that experienced a lot of changes — some good — some not so good. For Tranax it was a defining year. The year was shaped by a competitive market — tight money for ATM investing; vault cash was tight; credit card rates were through the roof; and states attacked the industry trying to milk additional tax money. It was no secret that my competitors would have relished my death. (They sure tried hard enough.) It was definitely a recipe for doom. And the fact that Tranax not only "made it" but managed to have a banner year of more than 8,000 units sold — far above expectation from both the competition and upper Tranax management — speaks volumes. So how did Tranax survive? It all started with the introduction of new products that fit the market — at the right time. And it was boosted by a group of distributors that saw the need not only to keep Tranax in the market for their competitive edge, but also for the innovation that the "new" Tranax brought to the market. This survival is in no way linked to what NH and Triton did — or how they could have combined in the market to "kill Tranax." Tranax has the right products in the right place at the right time at the right price — that is what allows Tranax to survive 2009 and beyond — nothing to do with a merger or buyout. Yep. A lot of ups and downs in 2009. I hope that your 2010 is great — and that next year Tranax will be mentioned in the top 5 good things that happened in the ATM industry. — Bill Dunn, Tranax |
Public CompaniesNorth AmericaTrends / StatisticsDistributors / ISO / IADRetail / Off-PremisesATM HistoryManufacturersBank / Credit UnionSecurityATMGurusDiebold NixdorfHyosungTranax Technologies, Inc.TritonWincor Nixdorf International
Included In This Story
Hyosung Americas
Hyosung Americas is a global human experience maker that bridges the physical and virtual worlds. We do this by harnessing our unique combination of a manufacturer’s soul with an innovator’s mindset to build a platform of integrated products, services, and ideas that improve life’s day-to-day interactions for everyone.
Request Info
Learn More
ATMGurus.com
ATMGurus offers a large selection of new, refurbished and closeout parts, repair service and training for your Triton, Tranax, Tidel, Hantle and Nautilus Hyosung units. With over $10M of parts in stock, we have what you need to keep your ATMs running profitably.
Request Info
Learn More
Triton Systems
Triton FI based products • NO Windows 10™ Upgrade • Secured locked down system that is virus/malware resistant • Flexible configurations - Drive-up and Walk-up • Triton's high security standards • NFC, anti-skim card reader, IP camera and level 1 vaults are all options • Triton Connect monitoring • Lower cost
Request Info
Learn More
Diebold Nixdorf
As a global technology leader and innovative services provider, Diebold Nixdorf delivers the solutions that enable financial institutions to improve efficiencies, protect assets and better serve consumers.
Request Info
Learn MoreRelated Media
SecurityPresented ByDiebold Nixdorf
Presented ByDiebold Nixdorf
Subscribe
Get the latest news and resources from ATM Marketplace.
