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Making the scene at "ATMs in the Americas"

ATMIA conferences just keep getting bigger and better, if last week's 'ATMs in the Americas' event in Miami is any indication. Forty-five exhibitors from all areas of the ATM industry, some 450 attendees and a film crew from the New York Times all made the scene in downtown Miami.

March 12, 2003

The ATM Industry Association (ATMIA) conferences just keep getting bigger and better, if last week's "ATMs in the Americas" event in Miami is any indication.

Forty-five exhibitors from all areas of the ATM industry, some 450 attendees and a film crew from the New York Times all made the scene in downtown Miami. Despite the lure of sunny skies and nearby South Beach, the presentations were largely well attended.

There was a decidedly continental flavor, with speakers covering the ATM markets in Canada, Panama and Latin America, as well as the U.S. More topics of relevance to financial institutions, including person-to-person payments, the changing role of the bank branch and debit card marketing dynamics, were on the agenda.

Incoming ATMIA president Tom Harper, left, gets some words of advice from outgoing president Lyle Elias.

For the first time ever, there were pre- and post-show workshops. ATMIA presented a full-day, pre-show workshop on ATM security, and event co-sponsor NYCE Corporation wrapped the event by covering compliance with Triple DES specifications, providing ATM services for the unbanked and bank sponsorship of ISOs from a network perspective.

Here are some items that caught this editor's ear and eye:

No big whoop: Keynote speaker Dennis Lynch, NYCE's president and chief executive, entertained the crowd with a slide showing an early off-premise ATM, an incredibly bulky machine. "You could use it not only to get your cash but also to do your laundry," quipped Lynch. In those days, he said, "it truly was a big deal" to get an ATM out of the bank branch. "Not like today, where some deployers can move 15 machines at 2:30 and be serving their customers at new locations by 4:30."

Banking on it: The nation's top 20 banks accounted for 27.3 percent of ATM transactions in 2002, up from 21.9 percent in 1997 -- even as their share of total ATMs fell from 34.8 percent in 1997 to just 19.8 percent in 2002. Lynch called the numbers "an interesting anomaly," driven at least partly by bank acquisitions and mergers.

Big getting bigger: The top 25 issuers now account for 64 percent of all ATM/debit cards, with the top 10 issuing more than 45 percent of them. "As certain as we're sitting here, one year from now that number will be something higher than 64 percent," Lynch said. This aggregation is important, he added, because of issuers' influence on the market. "They have control over how the consumer will perform."

The answer, man: One of a series of questions that Lynch posed was: How many ATMs do we need in America? "More," came a succinct response from the audience.

Tidel Technologies created plenty of buzz for its new line of ATMs, set to be introduced later this month, by keeping them under wraps in the crate at right.

Eye of the tiger: Doug Deitel, executive vice president of corporate services for super ISO Cardtronics, kicked off his presentation on "Consolidation and Outsourcing in the U.S. ATM Market" with an anecdote about two guys in the jungle who hear a tiger approach. As one slips on running shoes, his companion says, "You're never going to be able to outrun a tiger." The runner responds, "I don't have to outrun the tiger, I just have to be able to outrun you." Lest anyone miss the point, Deitel concluded his presentation by slipping into a pair of Nikes.

For what it's worth: Consolidators like Cardtronics look for a number of things when making an acquisition, Deitel said. Among them: remaining terms on ATM contracts; status of contracts with vendors; condition of ATMs and ability to upgrade (or lack thereof); and overall profitability of a company. For those thinking of selling, Deitel advised, "Get an audit and clean up your balance sheet. A well-run company with good records is obviously going to command a better price."

Cash (management) is king: Deitel called effective cash management "probably the single most important component in winning bids for large corporate accounts." It's generally easier for bigger ISOs like Cardtronics, he said, because they can use their size to gain better treatment from armored car companies and vault cash providers.

Surprise, surprise: Noting that more consumers (37 percent) interact regularly with ATMs than with either branches or telephone banking (28 percent each), Peter Kulik, managing director of KLCI Research Group, said that many financial institutions are surprised to find ATMs are so important to their customers. "Typically, many of them have not analyzed their customers' interactions with various delivery channels."

Sales crossing: Cross selling, Kulik said, can be defined as pushing out a marketing campaign for a product or service to a large number of customers, with little regard for demographics. He defined cross buying as using business intelligence to analyze customer patterns to "determine the product they are most likely to purchase next," whether it's a loan or a certificate of deposit. To maximize the effectiveness of these offers, he said, it's important to promote them through each delivery channel, as well as to give consumers the ability to opt in or out.

Nextran Industries showed its new countertop model, the ComNet 1000.

Branching out: While 58 percent of all ATMs worldwide were installed in bank branches in 2001, that number has dropped dramatically from 73 percent in 1998, said Mark Glover, a senior researcher for Retail Banking Research (RBR). Analyzing the 2001 numbers further: 51 percent of ATMs in North America and Latin America were in non-branch locations, compared to 42 percent in Eastern Europe and 21 percent in Western Europe.

Shipping news: RBR expects annual ATM shipments worldwide to be 180,000 in 2003, Glover said, rising to a million machines by 2007. Most of those will be replacements, he said. "By 2007, we believe that less than three in 10 machines will be for new locations."

Big bucks: Glover said that RBR believes that a whopping $40 billion has been spent to acquire ATMs from 1967 to 2001, with likely four times that amount expended on installation and maintenance.

Ringing the bells: Ron Ferguson, Euronet's executive vice president of U.S. market development, said that Euronet expects to roll out its first "live" prepaid phone top-up application by the end of March, probably on a Triton ATM under contract with ISO Financial Technologies with Core Data Resources processing the top-up transactions. Euronet has signed about a dozen ISOs, as well as Genpass Technologies, to promote its top-up program, called PaySpot, to their customers. Between them, those deployers account for more than 20,000 ATMs, Ferguson said.

Thinking inside the box: Tidel Technologies created buzz for its newest line of ATMs, set to be introduced March 25 at its distributor conference, by showing a wooden crate marked "Tidel ATM, Opens 4-01-03" rather than the machine itself. Distributors who have received previews are talking up the 3400, which reportedly has a 10.4-inch color screen and other nice features at an attractive price point. What a stroke of marketing genius for Tidel to preview the ATMs that way, counting on the ISOs to talk amongst themselves.

Newest Nextran: Nextran Industries' ComNet 1000, an ATM that can be deployed on a countertop or a pedestal, inspired comments ranging from "very innovative" to "what a sexy-looking box" at the Nextran booth. Cool feature: a digital camera located above the screen that can record and archive up to 200,000 transactions. That way, film can be used to spot security problems or assist in Regulation E claims.

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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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