News

Bundled Communications Services Not Just For Consumer Market

Bundled communications packages are all the rage among the largest U.S. telecommunications firms. These firms try to entice consumers to use an all-in-one package that include a broadband Internet service, telephone service and television service.

May 3, 2006

ATM&Debit News - Bundled communications packages are all the rage among the largest U.S. telecommunications firms. These firms try to entice consumers to use an all-in-one package that include a broadband Internet service, telephone service and television service. Independent ATM providers also are selling bundled communications services to clients in order to cut the costs of ATM Communications and convert ATM Communications from a land-based phone service to a wireless service. "Our objective is to become a totally wireless network," says Ron Christensen, CEO of San Francisco-based Swipe USA Inc., an ATM independent sales organization. Swipe manages ATM contracts on 500 machines, mainly at retail locations in the San Francisco-Oakland region. Christensen says Swipe intends to become a totally wireless ATM service by next year. Swipe uses Verizon as its telephone line provider and Transaction Network System as an ATM transaction communications provider. Christensen says Swipe's strategy is to bundle all of a retailer's communications needs into one package. The goal is to cut the costs of providing wireless ATM communications below monthly costs of telephone dial-up services, which have stayed steady at about $50 a month. The idea is to bundle a retailer's existing Internet service costs with point-of-sale terminal communications costs as well as ATM communications costs. Among smaller retailers, POS terminal communications and ATM communications are commonly separate services. If these services are bundled, the cost for ATM communications using a wireless system drops to well below $50 a month, says Christensen. "Our objective is to make it Competitive with the dial-up line," he says. There is a one-time startup cost of about $250 per ATM, which includes a wireless router from Transaction Network Services for installation on ATMs, says Christensen. High-speed Web access for ATMs costs extra per month, but is generally unneeded for the relatively low data demands of ATM transaction communications, says Christensen. He says Swipe is "committed" to distributing 500 wireless routers in order to get lower bulk prices on the router. Many of the nations largest chain retailers, in particular chains with pay-at-the-pump payment card access, have for years bundled their pay merit communications. ATM communications -are bundled with existing wireless communications systems that remotely plug in their stores with a central, satellite-based communications network, Christensen notes. "We are talking about connecting mom&pops to the same kind of service the big guys get," he says. The benefits of going wireless on ATMs include more flexibility on deploying ATMs, faster transaction times and cost savings on replacing old, worn landlines, says Christensen. But wireless communications is not the only emerging communications option for retail ATM operators. Kent Phillips, vice president of sales for self-service solutions at Transaction Network Services, says a growing number of retailers now have broadband Internet-communications access via DSL, or Digital Subscriber Line, service on existing telephone lines. The same kind of bundling concept can occur using DSL as with cellular communications-based wireless services, says Phillips. Transaction Network offers its ConverterPoint hardware that allows ATMs to hook into a DSL service as well as a wireless system. Some retailers are using DSL service for business management functions on secure Web sites, says Phillips. Bundling ATM communications with existing DSL service can cut costs below $50 a month, he says. Phillips declined to say how much a conversion to DSL for ATMs would cost. But he says some ATM ISOs are selling the concept among retailer clients that the cost of hooking ATMs and point-of-sale terminals into a DSL service will pay for itself in a relatively short amount of time. Six separate phone lines can he plugged into a single DSL line. Phillips notes. Currently, however, the use of wireless ATM communications as an alternative to dial-up telephone lines is more entrenched than DSL service, says Phillips. About 4.000 off-premise ATMs use wireless communications through Transaction Network Services, he said. About 67% of the estimated 396,000 ATMs in the U.S. are in nonbank-branch locations, according to ATM&Debit News' EFT Data Book.