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Know-it-all
Contending that retailers don't like surprises when it comes to their ATMs, Diebold introduces a franchise program that eliminates the uncertainty.
October 8, 2000
Surprises may be welcome at a birthday party, but they're about as welcome as a paper jam in an ATM program.
Based on this truism, Diebold, Incorporated in May introduced an ATM franchise program designed to remove any element of surprise for the retail merchant.
"With this program, there is full protection and information disclosure for the merchant. Everything is clearly defined. There are no surprises," said Deb Volkmann, Diebold's retail program manager, noting that Diebold is required by the Federal Trade Commission to spell out all the details in what is called a uniform franchise offering.
Volkmann said that too many merchants have experienced "an unanticipated removal of an ATM from their business" when their monthly transaction volumes failed to cover the costs of their lease payment, service and other expenses.
For a fee of $84 a month, Diebold will install either a CashSource Plus 200 or CashSource Plus 200P machine, and will provide service, status monitoring, transaction processing and monthly reports. The fee will be waived if transactions exceed 150 a month.
Diebold encourages retailers to opt for the CashSource Plus 200P model, which features a cash provisor module that allows a merchant to load his own cash without opening the chest.
"The provisor allows him to recycle his own cash through the ATM, and hopefully get some of it back at his business, while minimizing any theft or security issues," Volkmann said.
Diebold shares revenues with the retailer, using a sliding scale based on monthly transaction volumes. Revenue sharing kicks in at 150 transactions a month, for which merchants receive 40 percent of the surcharge. Diebold will pay a maximum of 95 percent of the surcharge if transactions exceed 750 a month.
While other programs offer a far greater cut of the surcharge, merchants also generally end up paying more, Volkmann said. "If they're buying the hardware or paying extra for the service, they may not be able to reach the monthly transaction volumes necessary to make a profit."
Diebold is marketing its franchise program through direct mail, telemarketing and a small sales force in its retail division. In addition, the company is establishing alliances with groups like the National Association of College Stores.
Although Diebold was the leading supplier to U.S. financial institutions last year, the company hasn't experienced much success in the retail market with a third-party distribution model. Diebold is betting that the franchise program is different enough to at least catch the eye of jaded retailers.
The Holiday Inn North Canton (Ohio) is an early participant in the program. According to general manager Jeff Hach, the hotel never had an ATM before. While he had been approached by several ISOs, he was leery of working with companies he didn't know.
"I just wasn't comfortable with the idea of feeding my money into their machines and not knowing what kind of recourse I'd have if something went wrong," Hach said.
With Diebold, he added, "I know who they are and where they are. I know they'll make things right if there's a problem."
At the Professional Football Hall of Fame in Canton, Ohio, transaction volumes have increased since Diebold installed a CashSource Plus 200P, said business manager Mark Butterworth.
He attributes the increase to a reduction in downtime, largely due to the hands-on nature of the machine. "We have little, if any, downtime because we can go out, throw some money in the machine ourselves and get it operating again. The average Joe can work (the ATM)," he said.
Diebold's program entails "a lot less red tape" than a previous, less-than successful relationship with a third-party distributor, Butterworth said.
Butterworth said the Hall doesn't expect to make a large profit off of the machine, which sits at the entrance to its retail store. Instead, the Hall sees it as a service to those touring the facility, who will hopefully withdraw cash and spend some of it on souvenirs.
"We know we're not going to get 1,000 transactions every month. We've had enough every month to cover the monthly fee, which is great," he said.
For more information on Diebold's affiliate program, contact Krista Underwood at underwk@diebold.com.
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