Article
New division of FTI seeks to offer
ATM Wholesale, a new division of Financial Technologies, wants to be to ISOs what Sears & Roebuck was to Americans at the turn of the century -- a place where they can purchase practically everything they need. The company sells new and refurbished ATMs, parts and even service contracts.
October 7, 2001
When Philadelphia-based ISO Credit Card Center bit the dust on June 6, it left a lot of ATM customers without service – and a lot of ISOs scrambling to pick up those contracts.Richard Godwin, the owner of one such ISO, Denver-based Commercial Union, saw CCC's Chapter 11 filing as a chance to extend his business. But he needed a good supplier of parts and know-how.
He turned toATM Wholesale, a recently established division of Jackson, Miss.-basedFinancial Technologies, one of the country's largest ISOs.
"One of the reasons I go there is I find them a little bit less expensive than when I go to somebody else who wants an arm and a leg for the part," Godwin said.
According to Cathy Chapman,ATM Wholesale's business development manager, charging less than a body part is what the company, which provides new and refurbished ATMs and parts, is all about.
"We have access to very low prices, and we're passing that along to other ISOs in our business," she said of FTI's new division, which she joined when it opened for business in July.
Chapman has a lot of responsibility. The company has a full-time staff of just three, along with two part-timers borrowed from FTI. One of the three full-timers is Clay Robertson, who Chapman calls "the most brilliant parts person in the world."
It was Robertson who helped Commercial Union's Godwin when he encountered one of the quirkier machines on the market, the TBS 8000. Jointly produced with NCR, the TBS 8000 was sold for several months in 1999 and discontinued after a marketing agreement between TBS and NCR was severed.
Godwin said the machine had an NCR cash dispenser, "and they used another part here and another part somewhere else. But Clay worked on it very diligently for me, and we got the parts and got them put in."
ATM Wholesale excels in finding such strange and apparently discontinued items, Godwin said. "They're very knowledgeable of just about everything that's out there."
According to Peter Kulik, managing director of Dayton, Ohio-based KLCI Research Group, the parts business is a small but significant cog in the wheel of the ISO market. "Certainly parts are important to the ISOs," he said.
In KLCI's "Industry Benchmark Report on ATM Services" published at the beginning of the year, Kulik found that ISOs spend less than 10 percent of their time on parts stocking and parts management. In terms of budget, parts stocking and repair represent about 2.5 percent of the total support costs for ATMs.
KLCI's report included data from 15 ISOs, 12 based in the U.S. and three in Canada.
Chapman described ATM Wholesale as a one-stop shop for ISOs. "If an ISO has a hole in their business or if they can't meet a need, we can fill that for them," she said.
ATM Wholesale even offers service contracts nationwide. While that may appear to be a stretch for a three-employee concern, Chapman and Clay won't high-tail it all over the U.S. to perform repairs. Instead, ATM Wholesale leverages FTI's existing infrastructure.
"With FTI we have over 3,000 terminals now that we're processing. So we've developed a network of service technicians all over the country," Chapman explained.
While Chapman declined to give service rates, she did offer a sample of pricing for refurbished ATMs.
"Anywhere from $1,200 (for an older Tidel SC) to $5,000 – a little higher if you want a bank model," she said, adding thatrefurbished parts and machines are guaranteed for 60 days.
With such a steep markdown, how can ATM Wholesale make enough bucks to stay in business? Chapman summed it up this way: "Volume, volume, volume."
Kulik agreed. "We would expect that in this type of business," he said. "There's not much margin on parts. But if they can make it easier and be a single source for multiple vendors' parts, then there may be some value in that to the ISOs who have a multi-vendor installed base."
Understandably reluctant to reveal her privately-owned company's revenue goals, Chapman nevertheless said she hoped to generate a profit in one to two years.
She's encouraged by the initial response. Since ATM Wholesale began operations in July, 126 customers have signed on, about 90buying new equipment, 25 buying refurbished equipment, and the rest buying parts.
The company's largest order to date was $40,000 for 10 new ATMs.
ATM Wholesale can provide new NCR, Triton, Tidel and Cross machines because of its VAR (value added reseller) relationships with those manufacturers.
The company occasionally services Diebold as well. "It's not one of the, as I call it, 'big four,' but we can do parts and do service on Diebolds, and we do refurbish Diebolds," Chapman said, adding, "We have some Diebold CSPs (CashSource Plus) in stock right now."
Included In This Story
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.
