Article

ATM goes beyond fast cash

Software enhancements help check-cashing, bill-payment and deposit-automation make their way to FI ATMs.

October 9, 2006 by Valerie Killifer — senior editor, NetWorld Alliance

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In the retail space, 7-Eleven Inc. set the pace for advanced functions with its Vcom line.

The kiosk, which dispenses cash, cashes checks, and offers money orders, money transfers, bill-payment and Verizon phone services, was installed in 2002 in 98 locations throughout Dallas and Ft. Myers, Fla. Today the kiosks are deployed in 1,700 7-Elevens nationwide.

"At first we were targeting the underbanked, but have found that people who have a bank account like the convenience of using 7-Eleven's 24/7 Vcom when they need to cash a check or send a money order," wrote 7-Eleven's spokeswoman Margaret Chabris in an e-mail. "As we open new stores, they will receive new Vcom equipment."

Retailers have historically used self-service terminals - such as advanced-function ATMs - to cater to the unbanked and underbanked market, and to grab a bigger slice of their market share.

Now banks want in on the action, and strides in software are making it possible.

A shift in software applications - from OS/2 to Windows - has opened the door for FI ATM services. Now ATM manufacturers that cater to the FI space, such asDiebold Inc.,NCR Corp. andWincor Nixdorf International, are coming out with ATM and self-service lines that make advanced functions a reality for the FI sector.

"There's been a lot of very creative thinking on the retail side of things," said Jim Merrell, Diebold's director of self-service marketing and management. "Financial institutions watch and learn from retailers with creative marketing arms."

Diebold's line of Opteva ATMs offer advanced functions that include envelope-free ATM check deposit. And NCR's Personas ATM, utilizing its Aptra software, enables mobile phone pay-as-you-go transactions.

"The realization of ATMs, and the things that are happening, are only limited by imagination," Merrell said.

Fremont, Calif.-basedTranax Technologies, a supplier with a strong following in the entry-level retail ATM market, is using partnerships to strengthen its ATM offerings.

In August 2006, Tranax partnered with Burnaby, British Columbia-based Tio Networks Corp. to build and promote bill-payment at Tranax kiosks. (Read also,Tio Networks, Tranax partner.)

Tranax wanted to focus on giving self-service solutions to its customers, which led to discussions about what else can be offered at the ATM.

"What we're trying to do is expedite processes that people will want to use," said Jeffrey Lee, Tranax' director of product management.

The bill-pay function was the first discussed by Tranax and Tio; it is now one of Tranax' anchor applications. Check cashing is another service, and Tranax is expected soon to launch money-ordering and wire-transfers at its terminals under the Tio umbrella.

But how many functions are too many for consumers? That's a balance retailers have been trying to find, and many of them learned several years back that some functions don't make sense. (Read also,Ticket sales at the ATM make a comeback.)

"I think certain types of functions are a bit less obvious for banks to pull off, but they may be better for ISOs," said Madhavi Mantha, a senior analyst for Boston-based consultancy Celent LLC. "I'm not sure banks will have success with features outside the realm of payments or banking."

Some ISOs, although interested in advanced-function ATMs, are slightly hesitant to move into the deployment of those ATMs.

"All the profit is in dispensing money," said Rodd Sacchi, president of Santa Cruz, Calif.-based ATM Concepts Inc.

Sacchi said more functions confuse and intimidate customers; it all comes down to a public re-education.

To be successful with advanced functions, experts say, deployers must understand market differences. What works in one part of the world won't work in another; and what works in one neighborhood may not work in a different part of town.

Bill-pay and check-cashing functions are widely used and associated with consumers in South America. In Europe and Asia, cell-phone customers use ATMs to purchase prepaid mobile-phone minutes; the trend has yet to take off in the United States.

What's Important Software enhancements have made it easier to offer advanced functionalities at the ATM. FIs and retailers must find a balance between consumer comfortability and services, and advanced functions. Deployers must understand market differences to be successful with advanced functions .

"Part of the issue in North America is the use of prepaid phones is much lower than in other parts of the world because the prepaid cell phone isn't as ubiquitous here," Mantha said. "There are (U.S.) banks that are trying it, but the verdict is still out."

Bill Waugh, vice president of engineering for Wincor Nixdorf USA, said the United States leads in the deployment of single-function devices. In contrast, Germany and other European countries lead in the reduction of paper-based transactions. Europe also is working to move more transactions within the bank branch to self-service channels - a move that's promoting advanced functions at the ATM and other self-service terminals.

"There is a lot of activity within banks in areas of assisted self-service, where a kiosk is working in conjunction with a teller for certain transactions," Waugh said. "The ATM won't be another self-service device, it will be another delivery channel for the bank."