Article
How low can they go?
Low-end cash dispensers pack one heck of a bang for the buck. But will a floor rise up soon to put an end to the plummeting hardware prices? by Tom Harper, publisher
March 10, 2002
Mony Zenou, president of ATM manufacturer Lipman USA, thinks he's hit the lowest possible sale price for a new ATM. His machine, the Nurit 5000 series, carries a price tag of close to $3,000 depending on the volume purchased. �The goal behind (building our machine) was to provide low cost, not low performance and not compensating in security,� he said. �It's the only ATM, in my opinion, that could really break down to be a countertop ATM� with currency backfeeding capability. Is it true? Can a deployer really buy an ATM for only $3,000 and get away with it? �Six months ago we thought the absolute bottom price was going to be about $8,000, and that's certainly changed in just a half a year,� said Robert Nemens, marketing manager, worldwide marketing for Diebold. He said in addition to sub-level pricing, �Everybody's demanding more features. You're going to see low to moderately priced terminals that can add advertising and other types of revenue streams.� According to Nemens, the flow of foreign manufacturers like Hyosung, Siemens Nixdorf and Lipman into the American market is not finished. �Our intelligence says that there's still a lot of manufacturers that still want to play in the U.S. market.� But for Diebold the global market is a two-way street, and they're planning an offensive strategy. Nemens said, "Some of the emerging markets for off-premise that we see are in Europe, Latin America and Mexico--not necessarily the most popular ATM markets right now, but indicators say that's where the largest expansion will be.� Back to this low-price thing Lyle Elias, president of Hurst, Texas-based Greenlink Technologies, sees a stratifying effect separating the low-end cash dispenser (CD) industry into three separate layers. �Everybody's got $6-7,000 machines that are PC-based and running on Windows NT, and there's no doubt in my mind now that there are three price ranges for the off premise market,� he said. �There's $6-7,000; $4-5,000, where we are now; and the $3,000 level driven by very low-cost POS devices.� Elias explained that the CD market is overheating swiftly. �Rather than a few companies developing long-term growth strategies, twenty different companies jumped in with ideas that they were all going to be Triton overnight. The reality isn't there.� The same way that everybody's duking it out on the hardware level, it's just as bad or even worse on the processing level, he said. The processors are now getting down to over pennies per transaction. �What I like about this whole thing is the Diebolds and the NCRs are being forced to come down into reality,� said Chris Klein, senior vice president for ATM systems for BankAtlantic, Fort Lauderdale, Fla. Mr. Klein's bank operates over 600 ATMs in various off-premise locations including cruise ships and convenience stores. �What I see is top quality with pricing that continues to come down,� he said. �We're in massive off-premise environments, and I have to be very, very careful with what I'm putting out there and feel comfortable that's it going to be reliable. �I've spent a little more money than I probably needed to to make sure I've got what I feel is the most reliable equipment out there. You can go real cheap, but then you start sacrificing service quality, and that's not good in the short and long term for anybody.� The next low-end leap in technology Lyle Elias sees multimedia on the low-end horizon. The bandwidth-hogging technology will be fueled by higher modem speeds and flattening communication costs, and soon he predicts communications will exit the cost equation altogether. �The line communications will be so fast that you'll be able to download full motion vide and audio in real time. It's not that far away. When you think about, all that technology exists today, it's just that it hasn't been rolled out.� Nemens agreed, taking the concept to a global level. �A lot of the emerging countries are being driven by improvements in communications technology,� he said. �They're moving to satellite and wireless which is obviously going to drive the off-premise marketplace as well as full-function ATMs.� Klein said the monitors and other equipment available on the lower end are better than what were on the higher end just a few years ago. �I'm still looking for full motion commercials on these low-end cash dispensers,� he said. �I think the technology already exists for that today, it's just a mater of incorporating it into the lower-end product.� Klein is also expecting to see links to TicketMaster through CDs, allowing the consumer to buy local movie or theater tickets while in the convenience store. A self-correcting market? The question remains if used machines, or �re-marketed� machines, as Woody Alderman calls them, will compete on the lowest end of the totem pole. Alderman's Alpharetta, Ga.-based Atlanta Computer Group specializes in refurbishing older ATMs, and only recently has he seen the tidal wave of new low end CDs coming in his direction. With new machines offering superior technology for close to his own selling price of ATMs just a few years old, the aftermarket for this generation of machines holds potential pitfalls in the near future. Diebold's Nemens foresees a market driven by total cost of ATMs, not just hardware cost. �There are two ways that a manufacturer can influence the marketplace,� he said. �One is to drive the cost down of deployment with a less expensive machine or more efficiency in the service pricing, and the other is by making it easier to add new revenue streams like screen advertising, stamps and couponing. The end result is you can build a better business case for a low-volume site. I think that's becoming more and more critical as the sensitivity to surcharged transactions increases.� Where the low end is going one can only speculate, but according to Mony Zenou, a driving consumer force will be behind it. The quest for the best product at the lowest possible price--with high performance--will dominate manufacturers' minds. �Our concept was to do all of that,� said Zenou. >Sources: � Mony Zenou, president of Lipman USA, can be reached by phone at (516) 484 9898, e-mail nuritsys@lipmanusa.com; their URL is http://www.lipmanusa.com. � Lyle Elias, president of Greenlink Technologies, is at (817) 284-1026; e-mail him at greenlnk@grnlink.com. � Robert Nemens, marketing manager, worldwide marketing for Diebold, is reachable via Tiffini Bloniarz at (330) 490-6319, e-mail bloniat@diebold.com. � Chris Klein, BankAtlantic's senior vice president for ATM systems, is at (954) 760 5110, e-mail cdkck@aol.com.
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
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.
