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Diebold signs agreement with Turkish bank

September 15, 2010

Diebold Inc. has signed an ATM contract with Turkey’s fifth-largest bank based on assets within a year of opening a direct-sales office in the country.

Diebold, the world’s third-largest ATM manufacturer based on annual shipments, announced yesterday that it is providing 575 image-enabled Opteva ATMs to Vakifbank, which is based in Istanbul, Turkey’s largest city.

The full-service machines accept and dispense banknote deposits. The ATMs also are equipped with coin dispensers and Vakifbank’s customers can pay bills at the ATMs.

“Coin dispensing is a key feature on these ATMs,” said Michael Jacobsen, a Diebold spokesperson. “It allows bill payment by cash and having the change returned in coins. This is an important feature for the more cash-intensive Turkey market.”

Diebold equipped the machines with its customized Agilis software that will operate the ATM terminals. As part of the contract, Diebold signed a five-year software management-services agreement and a two-year hardware management-services agreement, Jacobsen said.

Vakifbank, which operates a nationwide network of 2,196 ATMs, will deploy the ATMs in through-the-wall locations in bank branches and off-premises locations, Jacobsen said. The financial institution, which was founded in 1954, is a corporate, commercial, investment and personal bank with 602 branches.

Diebold called its contract with Vakifbank a major success.

“This agreement with Vakifbank is a milestone for Diebold’s presence in Turkey, which is one of the top-growth markets in the EMEA (Europe Middle East Africa) region,” said Danilo Rivalta, vice president and general manager of Diebold EMEA Southern and Central Region. “This project is a great example of Diebold’s commitment to the Turkish market.”

Gil Luria, an analyst for Wedbush Securities in Los Angeles, agreed that contract was an important win for Diebold.

“The Turkey win is a nice one considering how recently Diebold has gotten into this market and shows they still have an opportunity to enter some European markets that NCR [Corp.] and Wincor Nixdorf [AG] currently dominate,” Luria said.

Diebold, which is based in North Canton, Ohio, opened a seven-person direct-sale office last October in Istanbul to build a closer relationship with Turkey’s financial institutions. The direct-sales office replaced a third-party distributor that called on banks for Diebold.

Diebold was attracted to Turkey because it is a fast-growing ATM market.

At the end of 2008, Turkey’s banks had deployed 22,586 ATMs, a 20 percent increase from a year earlier, said Dominic Hirsch, managing director of Retail Banking Research, a London-based strategic research and consulting firm. Last year, Turkey added 3,768 new ATMs, making it the leading country for ATM deployments in Western Europe for the fourth-consecutive year, Retail Banking Research said.

Turkey is the sixth-largest ATM market behind the "big five countries" in Western Europe, which are France, Germany, Italy, Spain and the United Kingdom. Retail Banking Research includes Turkey among countries in Western Europe, although geographically Turkey is located in Southeastern Europe and Western Asia.

Turkey’s ATM market, however, is dominated by NCR, the world’s largest ATM manufacturer based on annual shipments, and Wincor Nixdorf, the world’s second-largest ATM manufacturer based on shipments.

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