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Do ATM ISOs need a mouthpiece?

Should the independent ATM industry create a group to serve as its informed advocate, providing a central point for media inquiries among other functions? Maybe, says editor Ann All.

March 30, 2004

Does the retail ATM business need a mouthpiece?

With more media outlets interested in independent ATMs, it might make sense to have a savvy spokesperson available to field press inquiries like the one I received recently from a reporter at a weekly newspaper in New Jersey, one of the states interested in introducing legislation to regulate ISOs.

Yes, I sometimes receive calls from folks who find ATMmarketplace on the Internet while doing searches with terms like "ISOs" and "ATMs."

Ann All

I walked him through some of the basics. As with most calls like this I've fielded, it quickly became obvious that he had little if any knowledge of the business. For instance, he seemed surprised when I informed him that ISOs must be sponsored into EFT networks by financial institutions. (This is always one of my key points when I speak with those who have the impression that ISOs are not subject to any regulation.)

For those of us who tend to talk mostly with other folks in the ATM business, it's easy to forget that the majority of people haven't the foggiest idea of how non-bank ATMs get into convenience stores, gas stations and other retail locations. There are plenty of misconceptions out there.

Last month, while attending the ATM Industry Association conference in Tampa, Fla., I returned a call from a financial analyst. He wanted to find out more about retail ATMs because one of the companies his firm covers is Dover Corporation, the parent of Triton.

Five minutes into the conversation, he asked, "But aren't the majority of ATMs in the United States owned by banks?" Fifteen minutes later, he said, "Wow, this is really interesting. I had no idea there were so many different aspects to this business."

The ATMIA has posted a set of "talking points" on its Web site for members to use as a reference point in case they are ever contacted by a reporter. While it's a good starting point, this kind of a list has obvious limitations, not the least of which is reporters' tendency to take their questioning in unexpected directions. (It's just the way our minds work.)

ATM Institute?

An attendee of the Tampa conference suggested that the independent ATM industry should create a group that would not only provide a central point for media inquiries but also issue press releases on relevant topics, provide "form letters" that ISOs could send to their local newspapers, perhaps help conduct research on relevant topics and otherwise serve as an informed advocate.

The group could possibly help organize efforts designed to help improve the industry's overall image as a responsible, even compassionate kind of business. For instance, I know of individual ISOs that have used ATM screens and/or receipts to promote local charities. I've heard folks discuss using them to distribute images of missing children, much like has been done on milk cartons.

What if a significant number of ISOs -- particularly those with numerous locations at high-profile sites like hotels and malls -- participated in such a program? If they did, it would certainly make sense to promote it.

While we were talking, the Tampa attendee reminded me that the tobacco industry (another business that has weathered its share of image problems) created the Tobacco Institute to represent its common interests.

According to information in the New York State Archives (God, I love Google), the Institute was established in 1958 with four employees. It stepped up its public relations efforts in the 1960s when the government began introducing tobacco regulation. By 1977, it had 32 employees.

The Tobacco Institute positioned itself to respond to media inquiries, reducing the need for individual companies to do so. Because of its prominence, reporters would automatically call the Institute for most tobacco-related questions. If there was any negative fallout, it made more sense to direct it toward the Institute rather than any specific companies.

Because the independent ATM industry is smaller than the tobacco industry and sells a far more consumer friendly product, a hypothetical ATM Institute could be a much leaner organization than its tobacco counterpart.

I liked the attendee's suggestions, and I asked him if it made sense for the ATMIA to fulfill this role (as its already taken some steps in this direction with the talking points).

His opinion: the ATMIA is a little too inclusive to effectively represent ISOs' interests. He pointed out -- rightfully so -- that ISOs and financial institutions sometimes have dramatically different views on topics such as proposed ATM legislation.

The industry should present a united force where possible, he said, but ISOs need a narrowly focused group like an "Institute" to address its interests when they differ from those of FIs.

A number of organizations already serve FIs, including the American Bankers Association, the Credit Union National Association and the Independent Community Bankers of America.

Could the "Institute" exist under ATMIA's umbrella? Maybe.

While the specifics of such an idea remain hazy -- who could most effectively represent the interests of ISOs, how much would it cost and who would pay for it -- I think it's an intriguing proposition and one worth investigating. It might be a task for the ATMIA's newly created ISO commmittee.

Included In This Story

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ATM Industry Association (ATMIA)

The ATM Industry Association, founded in 1997, is a global non-profit trade association with over 10,500 members in 65 countries. The membership base covers the full range of this worldwide industry comprising over 2.2 million installed ATMs.

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