News

Extend your ATM network

January 24, 2005

Building ATM business and a loyal customer base through branding has proven successful for Tennessee-based Old Hickory Credit Union.

Old Hickory's brand has appeared on ATMs in Food Lion grocery stores since 1998, after the credit union signed on with Nationwide Money Services's branded cash program.

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The program offers financial institutions access to ATMs owned by NMS, an independent ATM operator. Banks and credit unions can offer their customers surcharge-free transactions at the ATMs; they also can use ATMs as real estate to promote their brands.

As part of the package, FIs' names and logos are displayed on the ATMs' screens or enclosures. The ATMs appear to be owned and operated by the bank or credit union, so customers feel comfortable, said Bob Colabrese, NMS's executive vice president.

"We use your name and logo to brand your ATM," he said. "And the branding is exclusive - we don't use anyone else's name or logo on your ATM."

Currently 64 credit unions and banks, located predominantly in the Southeast, participate in the branded cash program.

A partner's perspective

Old Hickory - NMS's longest-standing customer, a credit union with 25,000 members and $140 million in assets - has 18 branded ATMs in Food Lions throughout middle Tennessee. The credit union has nine of its own ATMs at branch locations.

Bonnette Dawson, Old Hickory's president and chief executive, said the agreement with NMS gave her credit union exposure and more convenient ATM locations for its membership.

"Through branding with Nationwide, we have branched out into Food Lion, which allows our customers to use our ATMs when they shop. When they see our branded ATMs, they know it's us," Dawson said.

Some of the ATMs at Food Lion locations, Dawson said, generate more than 1,000 transactions per month.

Old Hickory also has ATM sharing arrangements with eight other credit unions through the Choice Network, a surcharge-free alliance.

Union Bankshares, a holding company of four Virginia community banks with $1.7 billion in assets, expects to experience similar success.

Union Bankshares signed on with NMS in August 2004, increasing its ATM network by 39 ATMs through NMS. The bank has 41 branch ATMs and 47 off-premise ATMs, with 31 more slated for installment through NMS this year.

Tony Peay, Union Bankshares chief financial officer, said one of the ATMs contracted through NMS is averaging 500 transactions a month in an area that Union Bankshares was not reaching previously.

"That ATM is used by people who aren't current customers," he said. "The area was obviously underserved."

Primary benefits of the program, Peay said, include improved ATM fee-free access for customers. "And having our name branded on the ATMs helps our exposure."

FIs can join NMS' branding program for $100 to $200 per month. Banks and credit unions typically make a profit through fee-sharing arrangements with NMS, said Colabrese.