Article
Banking on new markets
Can Tranax and Triton sell their new, PC-based ATMs to financial institutions? In an increasingly competitive market, the two manufacturers are banking on it.
January 24, 2002
Can Tranax and Tritonsell their new, PC-based ATMs to financial institutions? In an increasingly competitive market, the two manufacturers are banking on it.
Up until now, both Tranax Technologies (the former Cross Technologies) and Triton have sold their products almost exclusively to ISOs, who in turn sold them to retailers. Financial institutions who, unlike retailers, have been buying ATMs for 20 years or more, tend to stick with their usual suppliers, NCR and Diebold.
But Brian Kett, Triton's executive vice president of sales and marketing, believes that banks with ATMs in off-site locations mustbecome more cost conscious if they want to remain in the retail space.
Like other deployers, banks have felt the financial squeeze as the number of transactions per machine declines. Yet they've sold their customers on the convenience of using ATMs in non-branch locations.
Will they stay or will they go?
Kett said it comes down to two choices: surrender the retail market to ISOs or cut the costs of deployment. "We think financial institutions will want to look at more cost-effective ways to service their client base and continue to participate in the retail market," he said.
Ditto, said Tranax Technologies President Hansup Kwon. "Equipment cost is nothing to sneeze at. It's hard to stay competitive in that market with a (NCR) Personas 75."
In October, Triton introduced the 9800, its first PC-based machine and one that the company hopes can cross over to the financial institution market. Marking a dramatic departure from Triton's flagship 9600 line, the 9800 boasts a 566 megahertz Celeron processor, 128 megabytes of RAM, 10 gigabyte hard drive and 1.44 megabyte floppy drive. It runs on the Windows 2000 operating system.
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Introduced in October, the 9800 is Triton's first PC-based ATM. Triton hopes it will hold crossover appeal for financial institutions. |
Other bank-friendly features: a 12-inch SVGA LCD screen and an optional sidecar attachment that can be outfitted with additional modules such as a depository.
Susan Napier, president and chief executive officer of Duluth, Ga.-based Financial Technology Solutions International, a reseller of new Triton and NCR and refurbished Triton, Diebold and NCR equipment, agreed with Kett and Kwon that banks with retail aspirations need to reduce their costs.
"(Banks) have been banging down my door for the ability to offer more features at a lower price. Like a lot of other companies, their boards have been pushing them into a conservative financial mode," she said. "I expect to sell hundreds (of the 9800) this year."
Tranax has two PC-based products it believes may appeal to banks. Introduced in 1999, the MiniBank 3000 has a Celeron processor and 64 megabytes of RAM, upgradeable to 256 megabytes. Like Triton's 9800, it has a high-resolution 12.1 LCD screen and can be equipped with a sidecar for added functionality.
The new Kiosk ATM, introduced at last month's BAI Retail Delivery Show in Anaheim, Calif., has a 15-inch LCD screen, Pentium processor and runs on Windows NT. One of the key differences between it and the MiniBank 3000 is that slots for peripherals have been integrated into the base unit so that no sidecar is necessary to add modules such as a statement printer, check scanner and barcode reader. A sidecar adds cost and lacks aesthetic appeal, Kwon said.
Calling the Kiosk ATM "the future model of a retail ATM," Kwon said, "I think there will be more of a blur between the financial institution and the off-premise ATM."
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The MiniBank 3000 is one of two PC-based models that Tranax Technologies wants to market to financial institutions and large retail chains. |
Kwon believes that his products are more likely to appeal to small to mid-size financial institutions rather than big bank deployers such as Bank of America, Wells Fargo and Fleet Bank. "We're going to encounter some skepticism from the big guys," he said.
Moving the machines
Triton and Tranax will have to overcome more than simple skepticism, said Dale Dentlinger, director of E*TRADE Access. He said that many banks buy their ATMs from NCR and Diebold because they have established larger relationships with them.
"They might have servers and teller equipment from NCR, or a Diebold vault and security system," he said, adding, "I think (banks) are more inclined to buy their equipment from the NCR or Diebold salesman who's in there every other week."
So who will sell the new Triton and Tranax products?
Triton's Kett suggested that his company may use both a national direct sales force "in the NCR and Diebold mold" as well as its traditional third-party distribution channel. Several of Triton's largest distributors, such as E*TRADE Access, already make some sales to financial institutions, he said.
"We believe our sales channels add value. They bring a wealth of experience and knowledge to the equation," Kett said. "As the ISO market matures, a number of the traditional ISOs are becoming more sophisticated."
Tranax also hinted that both a direct and indirect sales force may be used to sell its advanced-function ATMs. "We love the idea of working with our distributors to target the financial institutions they can sell to," said Tranax Marketing Director Scott Kleinman, "but we're not ruling out using a direct sales force."
ISOs will need to pump up their service offerings if they want to appeal to financial institutions and large retail chains, the two obvious markets for his Kiosk ATM, Kwon said.
Banks might come to ISOs for a turnkey program but not for equipment alone, agreed E*TRADE's Dentlinger. "Banks that are looking just to buy hardware aren't going to buy it from us; they're going to buy it directly from the manufacturer because they can get a better price."
In it for life
In addition to the upfront price paid for hardware, Triton President Ernest Burdette hopes financial institutions will consider the overall "cost of ownership," or lifetime maintenance of the machine. He contends that Triton has built its reputation by keeping service costs on its products down to a minimum.
Yet the cost of service generally rises along with the sophistication of an ATM, said Dane Young, president of ePay, Inc., an ATM service and installation contractor. "A lot of our service is done on a time and parts basis," he said. "With a PC, there's a good possibility the tech will have to be on site longer, so it?s going to increase the cost for the customer."
Triton Chief Technology Officer Bill Jackson said the company decided to extend its modular service philosophy to the 9800. "For the service techs who aren't comfortable with trouble shooting, we've designed it so the PC can be swapped out as one module. You just unplug a couple of cables and put a new one in there," he said.
Replacing the entire PC would obviously be far more expensive than analyzing the problem, said Rick Bennett, president of Ozona, Fla.-based TBG Reliance Corporation, designer of an automated service dispatch system called WEWATCH. Triton uses the WEWATCH system to track warranty repairs in its TASC (Triton Authorized Service Contractor) program.
"For want of a $100 board, you'd be holding another $1,000 in parts hostage," Bennett said.
Maintaining an inventory of parts could create a financial strain for those willing to troubleshoot, he added. "Many of the third-party, independent service contractors are significantly undercapitalized. They're not going to be able to continue to buy the suite of parts they?re going to need for the next two generations of machines."
For companies that support their own machines, "It may not make sense to install one 9800," Jackson said. "It requires the same effort to support one as it does 10 as far as obtaining the necessary training and keeping parts on hand."
Techs who do not undergo training before attempting to work on a 9800 will not receive technical support from Triton, Jackson said. "It's a more sophisticated product. We want them to come here so we can teach them the product rather than trying to teach them over the phone."
Young, of ePay, said his company uses only techs certified by the manufacturer to perform installations and warranty work and tries to use them for all repairs though that's not always possible.
"It's up to a tech whether they want to spend the time and money to go to Mississippi (home of Triton). Most techs won't go for the training unless they can see they're going to lose income if they don?t get the training," Young said.
Bennett, of TBG Reliance, would like to see more training offered via the Web. "The ATM industry isn't doing much in terms of utilizing the technology available today to train the masses," he said.
Dentlinger, of E*TRADE, said remote diagnostics will become more important in the PC-based world. "Today the merchant might do a fair amount of diagnostics, but that model will have to change. We're not going to be able to walk them through a bunch of commands and have them interpret the problem the way we do now."
What we have here is a failure to communicate
Another issue that must be addressed is the new machines' capability to communicate with legacy systems.
Kwon said he intends to offer Diebold and/or NCR emulation. "Financial institutions are so accustomed to it that I believe we'll have to support it," he said. "but I believe it may be used for deposits only. It will be difficult to re-adapt it for the advanced functionality such as check scanning. We don't want to limit ourselves."
Triton's Jackson said emulation will become less of an issue as the industry continues to move toward the WOSA/XFS standard. "With an XFS layer, I think ultimately you?ll be able to buy an emulation program from other companies and write applications to sit on top of it," he said.
Like Kwon, Jackson said that using the old protocols will limit what can be offered on the PC-based platform. "If you use those, you?re stuck with the old green screens. You can't get the enhanced graphic capabilities and colors you can with XFS."
In fact, Jackson added, a financial institution's desire to quickly incorporate Internet-based technology could be used as a sales tool. "You can put in a Triton (9800) for about the same cost as it would take to upgrade two big NCRs," he said.
Despite all of the challenges, both manufacturers seem convinced they have a decent shot at winning financial institutions' business.
"Before the 9800, our product lineup didn't address all of our market needs," said Triton's Burdette. "But we think this machine gives financial institutions a reason to look at our products.
"The biggest challenge will be getting that first unit into a financial institution."
Included In This Story
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