Article

Service could have cross-over appeal for ATMs, kiosks

What's good for the ATM is good for the kiosk, and vice versa. Based on this principle, several service companies are seeking to expand their customer bases by adding new machines to the mix.

February 26, 2003

What's good for the ATM is good for the kiosk, and vice versa.

Based on this principle, several service companies are seeking to expand their customer bases by adding new machines to the mix.

"The more products we can offer under one roof, the easier it will be to come to us," said Russ Hinely, vice president and director of diversified services for Denver-basedBantek, which currently offers cash replenishment and first-line service for ATMs in 35 states. "When you hit a plateau, you have to find something that complements your service offering if you are going to take it to the next level."

Hinely said it would make good economic sense to leverage Bantek's network of some 900 service technicians by having them service kiosks, prepaid phone card dispensers and other equipment in addition to ATMs.

By offering more work, Hinely said, Bantek can maintain more techs in more areas of the country -- ultimately offering savings to its customers, who won't have to pay as much in travel costs.

Bantek is also considering adding second-line ATM service to keep its techs consistently busy, Hinely said. "We believe we can transition into that pretty easily, and offer second line at a more attractive price point than the traditional providers."

Hinely attended a kiosk trade show last April, which piqued his interest even more. He called it a "natural transition" because of similarities between the machines, which share common components such as bill acceptors, printers and dispensers.

With projects like 7-Eleven's Vcom and Coinstar's pilot of dispensing prepaid products at its coin-counting machines, the lines between ATMs and kiosks are blurring even more, Hinely said.

Not so fast

But moving into new machines can be more complicated than it seems, said Mark Urso, president of Highland Park, N.J.-based Global Consulting Group. Urso worked for about a year-and-a-half withTAP Computer Services, a New Brunswick, N.J. company that provides service for kiosks owned by such high-profile clients as Barnes & Noble and the Department of Housing and Urban Development.

TAP wanted to expand its market, Urso said, because of the increasing difficulty in booking new kiosk business as the industry fell on hard economic times. "They'd get people who were interested in signing a contract, but their phone would be disconnected when they'd try to call them back," he said.

Urso and TAP targeted the retail ATM market, because the barrier to entry seemed lower than the bank market dominated by NCR and Diebold, and TAP began bidding for ATM service contracts with such major players as E*Trade Access.

The plans came to a halt in early 2002, Urso said, when TAP balked at investing the $10,000 to $15,000 he estimated it would take to bring the company's field technicians, help desk employees and others up to speed on ATMs.

The importance of training techs on new equipment cannot be understated, said Len Burns, president of ATM TechServ, a Menomonee Falls, Wis. company with about 50 technicians servicing ATMs in 40 states.

"If you send a tech out and he can't fix a machine, who's going to pay for it? Not the customer," Burns said.

The two markets require "a totally different mindset and expertise," Urso said. "You ask a computer technician to work with DES (encryption) keys, and he's lost. And the ATM guys are just as lost when you ask them to load and configure software."

Common ground

Wayne Vandekraak, vice president of operations forBluewire Technologies, downplayed the differences between the two markets. Techs employed by Portland, Ore.-based Bluewire service PC-based as well as firmware-based ATMs, he said, and thus have plenty of experience with software.

Like Bantek's Hinely, Vandekraak believes there are more similarities than differences between ATMs and kiosks. "Some of the movie theaters up here are using ticketing kiosks. They have a card reader, a printer and an LCD. The biggest difference is they dispense tickets instead of cash," he said.

While Bluewire offers nationwide coverage, it is a difficult model to justify based on servicing only one type of hardware. "It's hard to keep somebody on the payroll in all 50 states if you only have a certain amount of equipment for them to support," Vandekraak said, noting that Bluewire is already moving into the point-of-sale market in an effort to keep its techs hopping.

Vandekraak believes it may be easier to convince other industries of the wisdom of signing long-term service contracts rather than paying on a time and materials basis as many ISOs choose to do. Without long-term contracts, he said, it's difficult to achieve the economies of scale that ultimately would allow Bluewire to offer its clients better rates.

Because the kiosk industry is less mature than the ATM business, fewer companies have had a chance to build a service infrastructure, Vandekraak said. "If it's anything like the ATM business, the companies would want to focus on sales and getting kiosks out there at first. So they may be more likely to use someone like us for service."

Even with the TAP experience behind him, Global Consulting's Urso believes there are companies who will successfully play in both the ATM and kiosk service space. "It's a viable option, provided someone is willing to devote enough funds to it and allow for a reasonable ramp-up period," he said.