Independent deployers' big opportunity lies in bank ATM outsourcing, study finds

The ATM Industry Association and Tremont Capital Group, a consulting firm specializing in the ATM industry, have completed their analysis of independently operated ATMs in the Americas.  

The proprietary analysis, led by Tremont Capital Group CEO Sam M. Ditzion, used data compiled from interviews and surveys of nearly three dozen ATM operators, processors and other industry experts in Canada, Latin America and the United States, an ATMIA press release said.

The analysis does not include financial institution ATMs, except in regard to bank-branding or outsourcing arrangements with an IAD.

"Sam has unearthed some fascinating facts in a groundbreaking study," ATMIA CEO Mike Lee said in the release. "We wanted to find out what the opportunities are for outsourcing and for new IAD markets."

According to Ditzion, the IAD sector in Canada and the U.S. is "quite mature," but regulatory, structural, economic, and security complexity have hampered IAD growth in some Latin American nations.

For mature markets in the Americas, the greatest growth opportunity now lies in ATM outsourcing arrangements, "as it allows financial institutions to maximize operating efficiencies and potentially improve their bottom lines," Ditzion said.

Tremont Capital Group expects a growing shift towards smaller financial institutions outsourcing all aspects of their ATM operations to IADs, according to the release.

Among Tremont's other findings in the ATMIA study:

Canada

  • Approximately 100 IADs operate approximately 38,000 ATMs.
  • Of the IAD total approximately 61 percent are operated by the country's three largest IADs — Cardtronics, Access Cash and Stanley. The remainder of the IAD market is highly fragmented.
  • Approximately 3,000 IAD-operated ATMs are part of a bank-branding arrangement with a financial institution.
  • Fewer than 250 ATMs operate under a comprehensive ATM outsourcing arrangement with an IAD.

United States

  • In the U.S., more than 100 IADs operate approximately 330,000 ATMs.
  •  Of IAD ATMs, approximately 75 percent are operated or processed (or both) by the nation's two largest IADs — Cardtronics and Payment Alliance International. The remainder of the market is highly fragmented.
  • Approximately 30,000 IAD-operated ATMs are part of a bank-branding arrangement with a financial institution.
  • Fewer than 3,000 ATMs operate under a comprehensive ATM outsourcing arrangement with an IAD.

Latin America

  • Approximately 15 IADs operate approximately 25,000 ATMs, which are deployed primarily in Brazil, Mexico and Puerto Rico.
  • Following a regulatory change by the Central Bank of Argentina to allow IAD-operated ATMs, a small but growing number have been deployed.
  • Of IAD ATMs, approximately 91 percent are operated by three IADs — Cardtronics, Saque e Pague and Tecban Banco24Horas.
  • Approximately 22,000 IAD-operated ATMs are part of a bank-branding arrangement with a financial institution.
  • In Brazil, ATM toppers of the largest operator, Tecban, carry the logos of five Brazilian banks.
  •  Fewer than 250 ATMs operate under a comprehensive ATM outsourcing arrangement with an IAD.

Combined Americas

  • More than 215 IADs operate approximately 393,000 ATMs.
  • Of the total, approximately 55,000 of these IAD ATMs are part of a bank-branding arrangement with a financial institution.
  • Fewer than 3,500 ATMs operate under a comprehensive ATM outsourcing arrangement with an IAD.
  • Approximately 14 percent of IAD-operated ATMs are part of a bank-branding arrangement with a financial institution.

Association members can view the findings at the ATMIA website.


Topics: Bank / Credit Union, Distributors / ISO / IAD, Outsourcing, Trends / Statistics

Companies: Stanley Sargent and Greenleaf, Cardtronics, ATM Industry Association (ATMIA), Payment Alliance International


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