News

Making money move

As with several other advanced function transactions, 7-Eleven is paving the way for money transfer via the ATM by offering the service at its Vcom units.

January 3, 2002

When a customer steps up to an ATM in, say, Los Angeles and wants to send a cash transfer to someone in New York, just how will he or she be able to do it?

In the case of Western Union and the money transfer service it offers at 7-Eleven stores with Vcom machines and more standardized ATMs, customers will go through a two-step process.

First, cash senders set up a temporary holding account with Western Union. They phone a Western Union office and provide details - the amount of money to send, the name and address of the sender and recipient, along with other basic information. Western Union then gives senders a one-time-only PIN plus a pass code that recipients must use to collect their cash.

"A cash receiver then phones Western Union or visits an office, saying they're expecting, say, $500," said Werner Fouche, one of the architects of Mosaic Software's Postilion platform that is used in 7-Eleven ATMs and Vcom machines. "Western Union checks its records and asks for the password. Once they've validated the receiver's identification, they give him or her a receiver PIN for one-time-only use. The receiver goes to any ATM, selects the transaction to receive money, enters the PIN, and the money comes out." 

A cash sender likewise goes to any ATM offering cash transfer, enters the PIN, confirms the amount to send, and pays the amount plus transaction fee into the machine with cash (on machines with cash acceptance capability), debit card or credit card.

Because the ATM system will be linked to Western Union's agent office locations, sending and pickup points are available either through ATMs, through agent offices or through a combination of the two.

"We're providing the sender the ability to either send wire transfers from a Western Union office or the ATM. Then the receiver can go and collect at the ATM or at a branch office," Fouche said. "In effect, that provides four options in how the money is sent and received." 

While Western Union has partnered with ACI to offer the service to major financial institutions that already use ACI's BASE24 software platform, Mosaic Software's Postilion software system - which allows for expanded financial transactions on Vcom units and ATMs - has been deployed in 7-Eleven stores for several months.

Vcoms are "virtual commerce" terminals - a super ATM of sorts that goes well beyond the range of features offered on standard ATMs. With a national rollout of the machines that is only now beginning, Vcoms offer such functions as check cashing, bill payment and money orders - with other services planned, such as purchasing event tickets and obtaining everything from local news to travel directions to lottery results.

Vcoms facilitate cash transfer because the units have a phone - so customers can do the entire transaction at the machine.

"When the handset is picked up, it automatically dials a VRU (Voice Response Unit), which instructs the customer to select a number on the phone keypad for the transaction desired - such as one for check cashing or two for cash transfer," said Chris Klein, Mosaic's executive vice president of marketing. "That connects the customer with the appropriate operator, the transaction information is collected, and the PIN is issued. After that, the transaction is completed by following instructions on the machine's screen."

Eventually, Klein said, the system will bypass an operator completely and connect directly with Western Union's Z-Cash database, which will provide automated instructions for the information needed to issue a PIN.

Given that 7-Eleven outlets serve six million customers a day, the potential of the Vcom makes it particularly attractive for cash transfers. The first 94 units were installed in stores in Texas and Florida. Members of large Hispanic communities in those states frequently use money transfer services to send cash to relatives in Mexico and other Latin American countries.

The Vcom also has an edge over most other ATMs for money transfer because of the denominations stocked in the machine.

"One big difference in the Vcom unit from standard ATMs is that where most ATMs only stock 10s and 20s as bills, the Vcoms also have dollar bills and five dollar bills," said Klein. "As a result, the Vcoms can get down to the exact amount of the cash transfer in bill denomination."

To avoid dispensing coins - which not only provides more cost for the initial ATM hardware but also is the weakest physical link in terms of maintenance and breakdowns - the money transfer transaction fee is calculated to round off the entire payment to the nearest dollar.

AmStar Systems, which is adding its ATMs to the cash transfer system offered by Dolex Dollar Express, a Hispanic-run organization and subsidiary of the Ixe Bank which focuses on the lucrative U.S.-to-Mexico market, will offer two different approaches for consumers.

Regular Dolex customers will be issued "Amigo" cards to use on any of AmStar's units.

"They just do a card swipe, point on a touch screen how much money they want to send, and Dolex handles it from there," said AmStar's Dick Adams. "You can get the money in Mexico in 10 minutes. Without the Amigo card, they can still do a manual transaction at a machine, paying for the transfer there."

InnoVentry, based in San Francisco, has not yet released details of its planned deployment of cash transfer service this fall, but with its RPM financial service kiosks, the company has units with capabilities similar to Vcoms and likely will allow consumers to transfer cash in similar ways.

Western Union chose Omaha-based ACI Worldwide and its BASE24 financial software platform to be its major partner in offering cash transfer services because of ACI's existing ATM software arrangement with a number of major financial institutions.

However, by developing and deploying its broad-based Postilion software for Vcoms and American Express-owned ATMs at 7-Eleven stores, Mosaic Software plans to likewise tap into the burgeoning market because it can offer services well beyond adding just cash transfer capabilities.

Financial institutions that already have a large investment in ACI's Base24 for cash transfer obviously wouldn't want to switch to Mosaic's system for that reason alone, but the additional services added to their existing ACI platform could prove an enticement to add the Postilion software.

"They could put us in front of the ACI system and add not only wire transfer, but ticketing for theaters, cell phone payments, insurance purchases … a whole host of transactions, just as Vcom units and the American Express ATMs do now," Klein said.