Article
Going the distance
Cross International Technologies, a subsidiary of South Korea's Hyosung Computer, broke away from the low-end ATM pack with its Mini-Bank 1000 in 1999. One of its biggest competitors, Triton's Mako, stumbled in '99 -- but will likely run a stronger race this year.by Ann All, editor
March 13, 2000
For Hansup Kwon, president of Cross International Technologies Inc., 1999 will be a year to remember. It was a coming-out party for Cross, the Fremont, Calif.-based business partner of South Korea's Hyosung Computer. The success of its Mini-Bank ATMs, especially the low-end Mini-Bank 1000, established Cross as a major player in the off-premise market. While Cross shipped just 650 units in 1998, the company's numbers for 1999 will easily top 6,000. That total exceeded Kwon's wildest expectations. "I said I'd be very happy if we sold 2,000 to 3,000 units (in 1999)," he said. About half of those units were Mini-Bank 1000s. The model's success proved there was a compelling business case for lower-priced hardware. Pricing pressure ISOs were among the earliest to identify the downward pressure of the off-site ATM market. "Picture the market as a pyramid, with high-volume locations at the top and low volumes at the bottom," said Bob Cannon, president of Momentum Cash Systems, a Houston-based ISO. "It fills from the top down, and you need a less expensive piece of equipment for those remaining locations." Kwon "came in at a good time," Cannon said. "He's a smart man, and he's well financed." With a monthly lease payment of $119, Kwon said the Mini-Bank 1000 is designed for locations that do 200 or so transactions a month. "It makes ATMs affordable all of a sudden," he added.
Oops Cross was not the only manufacturer to release a price-conscious product in 1999. Triton Systems, the off-premise market leader, debuted the Mako, which was priced about 20 percent lower than its flagship 9600 -- but the release was a rare misstep for Triton.
Back on track That should change in 2000, Paull predicted. "We don't underestimate our competitors and what they may be able to do, but I think we're going to do quite well with the re-launch of this product." Triton's new Long Beach, Miss. production facility is now cranking out the retooled Makos in high volume, and the company recently announced that it would reimburse its distributors to cover the cost of service calls to retrofit the already-installed Makos. And Triton "sharpened the price," Paull said, so that it's now about 10 percent lower than it was in 1999. "We could have offered the lower price last year, but when we were delivering late and had initial quality problems, it didn't make sense to try and blast more units out." Triton's distributors seem largely tolerant of the Mako's early stumble. Sam Jonas, president of Cash Resources Inc., an Englewood, Colo.-based ISO, pointed out that it's not unusual for glitches to show up in early versions of any product, including ATMs. And, he added, recent history proves that Triton delivers on its promises. "When Triton came out with the 9600, they had problems with the printer," Jonas said. "And that machine went on to become arguably the greatest off-site ATM ever deployed." Cannon, of Momentum Cash, agreed that Triton's reputation should help smooth the Mako's re-release. "I don't think they'll have to carry that Mako baggage for very long. In fact, I'm not sure they're carrying it now," he said. Think different The Mini-Bank 1000's success is about more than price alone, Kwon said. "It's a total business model we are doing that is quite different from the competition." For instance, Mini-Bank terminals are assembled at the Hyosung plant in South Korea, than programmed and configured to order in California. That makes life easier on Cross distributors, Kwon explained. "When it arrives, it takes about 30 minutes to install. We make the distributor's business cycle much faster so he can go out and sell more." Perhaps the biggest difference between Cross and its competitors, Kwon said, is his company's "what you see is what you get" approach to selling ATMs. On the Mini-Bank 1000, the only non-standard options are a UL 291 safe and a backlit high topper for advertising. (Editor's note: the UL 291 safe will become a standard feature in February). Optional features on the Mini-Bank 2000 are limited to a Level 1 vault, an extra cassette and the topper. "The other guys, they advertise a unit as one price and then start adding options. It's like when you go to buy a car, and you don't see the price of all the additions that come with it," he said. Even the price of freight is included on Cross machines. "When a guy in New York has to pay $200 for freight versus a guy in San Francisco paying almost nothing, that does not create a level playing field," Kwon said. "Our price is equivalent when it arrives at the location where they want to sell. That's what I call a level playing field." How much technology? Paull agrees that while price is important, it's not the "key differentiation" of Triton's Mako. Banking on offsite deployers' interest in advertising, Triton offers several advertising-friendly upgrades, including a color screen, speedier modems and beefed-up memory. The cost of these upgrades is "very modest," Paull said. The majority of Triton distributors are opting for an upgraded version of the Mako rather than the base model, which has a monochrome screen, 2400 baud modem and one-and-a-half megs of memory. "We really think that in the next six months, the advertising business model is going to become more crystallized. Having more media capabilities will have some meaning as far as enhancing revenues," Paull said. Jonas, of Cash Resources, is one deployer who agrees with Paull. "A lot of people are determined to make something really happen this year in regard to advertising," he said. "Within 12 months, there will be a lot of merchants crying about bad technology decisions." In that respect, Jonas believes the Mako may have the advantage over the Mini-Bank 1000. The Mini-Bank 1000 is "fixed technology," he said. "What you buy now is what it will always be." Cannon, of Momentum Cash, isn't so sure. "If higher functionality isn't being utilized, why pay more for that box?" he asked. "Over time, advertising may pay off -- but the market today is still about getting cash out of that machine." They're the top Both Cross and Triton are preparing their versions of a new advertising add-on: a topper with full-motion video capability. The toppers, which can be seen and heard several aisles away, may turn the head of even a non-ATM user, Paull said. That's important to advertisers, who calculate what they will pay based on number of impressions. Triton's version, which will be available on both the Mako and the 9600, is slated for late spring. Kwon, whose full-motion topper also will debut this spring, thinks that ads on toppers are far more effective than those on small ATM screens. "If you've got a six-inch screen, unless people are really looking at it, they're not going to get a whole lot of message out of it," he said. Cross already offers a low-budget topper: a 15-inch, erasable whiteboard. Noting that many small merchants scrawl in-store specials on whiteboards, Kwon said even these highly localized ads are bound to be more effective at an ATM, where they have the attention of a captive audience.
Included In This Story
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
