News

Can small change make big impact at ATM?

While most efforts to re-engineer ATM deposits have focused on check imaging, a few financial institutions and vendors are experimenting with coin acceptance at the ATM.

January 14, 2003

Lots of Americans have accumulated drawers and jars full of coins, as evidenced by the success of Coinstar. The Bellevue, Wash.-based company has built a business on turning coins into cash at 10,000 kiosks at retail sites in North America and the UK. What's more, it collects a 9 percent fee for the service.

According to a Dow Jones report, Coinstar expects to beat analysts' estimates for 2002 with revenues of nearly $150 million. (Actual results to be released on Feb. 6, per the report.)

Yet despite a new focus on the ATM as a depository -- with a number of banks and vendors testing digital check scanners and bunch note acceptors to make the machine more deposit-friendly -- few financial institutions have expressed interest in moving the lowly coin from teller lines to the ATM.

(Oddly enough, an August 2002 Coinstar news release mentions an 18-location pilot with Cleveland, Ohio-based Charter One Bank to test bank installations of its kiosks. Neither Coinstar nor Charter One responded to ATMmarketplace's requests for more information.)

Golden opportunity

Cummins-Allison Corporation, whose currency sorting equipment is used mostly at teller stations, is working with Sacramento, Calif.-based Golden 1 Credit Union to roll out a new coin deposit ATM which it introduced at November's Retail Delivery show in Atlanta.

Steve Stapp, Golden 1's senior vice president, said his institution believes it can make a big impression on customers by letting them get rid of their small change at the ATM. Golden 1 already offers self-service coin-counting machines manufactured by Cummins-Allison at seven of its 65 branches. Some of them collect more than $30,000 a month, Stapp said.

At those machines, customers deposit their coins, then receive a receipt which they must take to a teller line to exchange for bills or to make a deposit. "We wanted to make it a more fully automated transaction for our members," Stapp said.

Stapp said Golden 1, which offers coin counting as a service to its members but collects a user fee from non-members, expects to install up to 10 coin deposit ATMs in 2003.

Coin acceptance is one of the applications possible on a Wincor-Nixdorf compactBANK, which is based on the manufacturer's ProCash 2100 platform.

While Golden 1 provided the catalyst needed to develop the coin deposit ATM, Mark Munro, a product planning director for Cummins-Allison, said his company was already headed in that direction. "We've been observing the marketplace moving toward self-service applications of our products for the last couple of years."

The machine's current incarnation does not dispense cash or perform other ATM transactions, but Munro said Cummins-Allison intends to add more functionality to the product.

An especially handy feature: It sorts each coin denomination into separate bags containing amounts specified by the Federal Reserve Bank (4,000 quarters, for example).

"We just put a tie on the bag when it's full, pull it off and deliver it to the Fed. They weigh it and give us credit," Stapp said. "It's so much quicker and easier than having a teller break open rolls of coins turned in by our members and count them."

Less labor

Freeing up tellers for more important tasks was also a motivator for Panama City, Fla.-based Tyndall Federal Credit Union, which has installed four Wincor Nixdorf compactBANKs at two of its branches. The compactBANKs, based on Wincor's ProCash 2100 platform, are supplemented with sidecars for offering non-traditional ATM features -- including coin acceptance.

While the compactBANKs do not sort coins into separate bags, Janet Turner, Tyndall's director of interactive services, said the credit union pays its service provider a small fee to incorporate coin collection into its regularly scheduled service runs. The provider sorts and counts coins at a central facility, then issues a cash ticket for each bag collected from Tyndall.

"Considering how many members a teller can serve in the time it would take to count and roll coins (deposited via the teller line) and it's only costing us a few dollars a bag to have it processed, I think we're coming out ahead," Turner said.

Like the Cummins-Allison machine, the compactBANK will count and validate coin (up to a quart jar's full) and reject ringers such as keys or tokens. The funds are credited to a customer's account. It also offers cash dispensing, loan payments, statement printing and other transactions.

Branch managers at the two Tyndall locations with compactBANKs "have been amazed at the customer interaction with the machines," Turner said. "People are coming in just to deposit their coins."

One of the compactBANKs is doing 3,500 transactions a month while the others hover around the 1,000 mark, Turner said. While those numbers may not seem high for a branch ATM, consider that both branches also have drive-up machines handling in excess of 15,000 transactions a month.

Turner said that Tyndall expects coin counting to be an effective recruitment tool among restaurant servers and others employed in the area's thriving tourism industry, many of whom receive tips in coin form.

Also of interest to Tyndall, which has a youth banking program called Tyndall Savers, is the coins being transported to branches in piggy banks. "We want to make those children members for life," Turner said.

Unlike Golden 1, Tyndall does not make coin acceptance available to non-members and has no plans to do so, Turner said. "We don't want a member to have to wait in line behind someone who is not a member - particularly behind someone feeding jars of coins into a machine."