Article

Why US IADs should dig deeper into value-added ATM services

With the redeployment of ATM fleets due to EMV and PCI, it makes sense to investigate the potential of new profit centers.

April 10, 2014 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

Value added services have been mainstream in Europe for a long time now, yet they're slow to catch on in the U.S. Why is that? And why should American IADs consider adding them?

ATM Marketplace took these questions to Anthony Genovese, VP of consulting services at Compass Plus, a company that has worked for years to help European clients implement income-generating add-on services at the ATM.

Genovese offered his thoughts on the obstacles that confront U.S. IADs when it comes to justifying value added services — and the opportunities that emerge when those obstacles are addressed in a thoughtful, collaborative way.

What kind of interest are you seeing now in value-added services?

We're still trying to figure out where it's all going to go in North America. We've been doing this stuff forever elsewhere in the world … and we really aren't seeing much of it at all in North America yet.

In North America it's really about prepaid cards and about billpay services in addition to cash dispense. We've heard a little bit about donations and things like that, especially around different disasters that have occurred, but not a lot.

Why is that?

A lot is operational cost control, dealing with the regulatory things around EMV. The value-added services are really icing on the cake and I'm not sure whether the IADs really have spent the time to understand the value proposition. So they tend to go back to their traditional model, you know, "I make X number of cents every time somebody gets cash, and these are the types of things where I need to spend my money, so help me resolve that."

I don't think it's helped that there's so much going on in this space — NFC and mobile wallet — there's all this confusion now and people are starting to think, "where will I put my money?"

If I'm an IAD, where do I begin to decide what new services to add — and how to implement them?

We sit down, we talk about the types of things you want to do; we would facilitate that. We would, first of all, evaluate the gear you have on site to determine how much of that is reusable, how much would need to be refreshed.

Depending on the services you wanted to offer, we would determine how much of that is off the shelf or how much would need to be built or customized for you. And then we would tell you this is how long it's going to take, how much it's going to cost and this would be your responsibility to acquire these pieces to deliver the solution.

It's the exact same thing you need to be doing in order to be EMV enabled. So it is part of that same conversation.

Speaking of EMV, deployers are already looking at major expenses for EMV and other upgrades. How can they justify spending more to enable value-added services?

By the numbers I understand the argument … [I]t's looking at different ways to generate money, different ways to differentiate your service and go out there with the view that you may need to invest a little bit here, but it is creating a new revenue model.

I think when you start looking at the cost of redeploying your fleet, you recognize that there are some big numbers there and it's time to kind of look at your selection of these devices and what capabilities they're going to give you.

And if I add those capabilities, what's the return?

It really depends on the location, but certainly if you look at some of the just plain kiosk providers that are going out there with a single service such as bill payment, that device justifies itself without even having cash dispensing capabilities.

So if you can put out a bare-bones vanilla device just to allow you to come up and do a payment, well, if you have a merchant location where it makes sense to also collect bill payments, why not put both services in that same real estate, that same spot and create additional revenue opportunity?

[As a consumer], if I'm able to go to your device and make that payment and you're able to then offer me that same service across a bunch of different devices and maybe help me find those devices, maybe even with a locator on my mobile phone, there's an advantage to that.

How do you see the future of value-added services unfolding for IADs?

If you have the right foundation, now you have this platform where you can do virtually anything, and you have these capabilities to drive the industry standard requirement to do things like Internet payments, or mobile payments or kiosks and ATMs. So you have all of these different channels, they really just become bolt-ons.

It's really limitless when you talk about an electronic payment, and especially when you start bringing the channels together. That's something that I don't think a lot of IADs have really focused on, is maybe even using a mobile device to supplement some of the capabilities of their devices.

And when you get into value-added services, that's just a natural extension. Especially if you have an app or some way that you can also then make contact and maybe even influence the behavior of that customer.

That customer then becomes your customer. And that gives you the ability to work with your merchants and bring those customers and merchants together.

photo: kelly sikkema

About Suzanne Cluckey

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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.