Article

Flite Plan: Going the distance in today's ATM marketplace (part II)

The founder of an ATM startup says the key to success is to 'go all in.'

August 23, 2013 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

In part I of ATM Marketplace's interview with Flite Banking Centers LLC Founder and President Michael Villarreal, the entrepreneur explained the inspiration for Flite, as well as the distinctively different ATM deployment model it represents.

In part II, Villarreal talks about his aspirations for the business and gives an assessment of the character, outlook and longterm opportunities for the startup IAD.

Q: Let's talk about Nectar — what is it exactly?

A: Nectar is our newly established surcharge-free network for participating financial institutions. Nectar is also a consumer-friendly and community-friendly network. Because we've linked the ATM with our digital advertising program, Nectar users can get promotional offerings and discounts from our advertisers — like discounts and giveaways.

This week, we've launched our "Commitment to Early Education" program; whichever elementary school our Nectar ATM is zoned to, Flite donates a percentage of the surcharge income to that school's PTA or PTO. We're very excited about this program and believe it will have a meaningful financial impact for the PTO and help us build our brand identity and market share in that community.

Q: So, let's I run an FI and am interested in getting into the Nectar network — does my FI have to meet certain qualifications?

A:No. We welcome any financial institution to participate and our pricing is based on actual usage, not the size of our network or the FI's active debit card holders. [So] a financial institution can select one, some or all of our locations — it's strictly up to their market needs.

Q: What are your aspirations for the Flite network?

To build a strategic network of ATMs that customers enjoy using and that our financial clients enjoy paying for. It is not our aspiration to have 80,000 dots on the map, but it is certainly our aspiration to have the most important dots on the map.

From a technology and processing standpoint, we would eventually like our network to be deposit-image capable. We'd like to be one of the first networks that can accept deposits for our financial members.

Q: Do you expect to launch a prepaid scheme eventually?

A: Yes. That is definitely in our near future.

Q: Are you looking at further expansion through acquisition?

A: Yes. However, acquisitions at this level — small companies — can be tricky, particularly dealing with owner operators. You really don't know what you're buying until you've already bought it. Therefore, while we have a very opportunistic mindset, we are careful with company acquisitions.

Q: How do you see that balancing out with organic growth? We have growth strategies and targets in place. We can execute organically or through strategic acquisitions. It is our job to evaluate which opportunity presents the highest value for our stakeholders.

Q: You seem to have put a lot of thought into your brand — how would you describe it?

A: Our Flite corporate logo is a hummingbird. We wanted a brand identity that was pleasant to look at and one that inspired a connection with the ATM user.

In today's world, people are constantly on the move — from home, to work, to eat, to shop. Occasionally, you need to access an ATM to facilitate this movement.

Our mission is to provide the most accessible ATMs so that our customers can be as efficient and graceful as a hummingbird. When we decided to brand our ATM network, Nectar was an obvious choice.

Q: How important is branding to the success of Flite?

A: It is very important because we want everyone to easily identify a Flite facility or Nectar ATM and associate that identity with a great and predictable experience. We put a lot of thought into our identity, but we put exponentially more effort into the way we manage our business, support our clients and give back to our communities.

Q: What challenges or obstacles does Flite face?

A: Obviously, our biggest challenge is securing the locations that our financial customers desire, for both our multibank facilities and our Nectar ATMs.]

Q: How will Flite succeed?

A: By continuously listening to our clients and serving the communities where we operate. Oh, and by not making the same mistake twice.

Q: How has the company been doing?

A: Considering that we technically entered the ATM operations business in January with the ATM Ventures acquisition, we are doing surprisingly well.

We quickly integrated the business and employees into Flite. We revisited all the company's financial relationships and contracts and established a new priority of delivering best in class products and services. Our multibank ATM facilities are performing nicely. Earlier this month we celebrated the two-year anniversary of our Upper Kirby drive-through location and the one-year anniversary of our walk-up retail location at The Shops of Houston Center. We plan to build another three to five multibank facilities and plan to install approximately 10 to 20 Nectar ATMs in the Greater Houston Area within the next 12 months.

Q: What are some recent successes?

A: We have several exciting programs underway. However, the development of Nectar will be a great success for the company for years to come.

We recently introduced the program to select clients and have not officially launched the program. However, last Friday we started accepting memberships. Our first Nectar client was Space City Credit Union. By the end of this week, their 8,400 local members will be able to use our Nectar ATMs surcharge-free.

Q: The past several years would seem like a tough time to get into the ATM industry, with interchange uncertainty and a mature market, among other difficulties. Is there really room for new players?

A: Absolutely! There is always room for innovation, particularly during times of market uncertainty. We are often amazed how financial institutions are being underserved by the industry.

Q: What advice would you give someone looking to start up a new IAD/ISO?

A: The same advice I would give anyone starting up any type of business: Start-ups are not for wimps! Do your homework, study the market and competition, define your competitive advantage, secure your capital and human resources, establish your goals and then — go all in!

Read more about ATM innovation.

About Suzanne Cluckey

Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.