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NCR is apparent winner of race to offer prepaid services

NCR has emerged the apparent winner in the race to offer prepaid services at U.S. ATMs with its recent announcement that Welch Systems, an Illinois ISO, is offering several prepaid services at about 50 ATMs in the St. Louis area through the manufacturer's iATMglobal Content Delivery Program.

October 16, 2002

NCR has emerged the apparent winner in the race to offer prepaid services at U.S. ATMs, with its recent announcement that Welch Systems is offering prepaid wireless and prepaid long-distance, as well as prepaid movie tickets, at about 50 ATMs in the St. Louis area through the manufacturer's iATMglobal Content Delivery Program.

"This is not a pilot. It's in full rollout today," said Jeff Hewitt, vice president of sales for the Peoria, Ill.-based Welch Systems, which has about 1,000 ATMs under contract in Illinois and Missouri.

NCR purchased iATMglobal from TRM Corporation last spring after the Portland, Ore.-based ISO's effort to develop an infrastructure to support iATMglobal's software stalled. At the time of the purchase, NCR already owned 20 percent of  iATMglobal after making a $5 million investment in the company.

Even before its initial investment in iATMglobal, NCR had ties to the company. The iATMglobal software, called RAAP (for Remote Access Application Protocol), was developed by Strategic Software Solutions, a Scottish company that also created the @tmLink software which NCR uses for remote monitoring and management of its entry-level ATMs. RAAP makes it possible to conduct non-traditional ATM transactions, such as e-commerce purchases, on machines running on an OS/2 operating system.

When it comes to push

NCR purchased the remaining 80 percent equity in iATMglobal "to accelerate deployment of the iATM solution," said Robb Straub, head of iATMglobal, in a March interview with ATMmarketplace. "This will allow us to provide the infrastructure and get the content to a broader marketplace faster."

If the current rollout is any indication, NCR seems to have succeeded. Five content providers have signed with iATMglobal: MCI WorldCom, BCGI and Radiant Technologies, all of which provide prepaid long-distance and/or wireless; online movie tickets seller movietickets.com; and online florist Flowers USA, which was recently purchased by FTD.

According to a Reutersreport, Verizon Wireless, America's largest wireless carrier, said it was testing ATM recharge services in St. Louis and plans to begin testing it in Boston by the end of this month. Verizon plans to offer the service nationwide in early 2003, according to Reuters.

Verizon is a client of BCGI, which partnered with iATMglobal in December of 2000 and with E*Trade Access last February.

More to follow

Straub said that in addition to Welch Systems, two other ISOs have signed agreements to offer services at their ATMs through iATMglobal. One of the other ISOs, whom Straub did not identify, has already rolled out iATMglobal content on a handful of its machines. Straub is not sure when the third ISO plans to introduce iATMglobal.

Hewitt said Welch Systems currently offers iATMglobal services on about 50 ATMs, all NCR EasyPoint models, and will eventually do so on up to 600 machines in the St. Louis area.

NCR hopes to promote its iATMglobal program, which offers consumers the opportunity to purchase prepaid services at ATMs, with toppers like these.

According to Straub, iATMglobal's RAAP software ships with all EasyPoint machines. It can be ordered on other NCR ATMs such as Personas. The minimum configuration recommended for RAAP, Straub said, is a 486 processor with 16 megabytes of memory.

"That's going to be on the cusp, depending on the other applications you are running," Straub said. "You might need a memory upgrade."

NCR's eventual plan is to make iATMglobal a vendor-independent program, Straub said.

To facilitate iATMglobal transactions, NCR is using a proprietary infrastructure. "It's rock solid, it works and it's available today," Straub said.

Concord EFS is providing routing, authorization, fee distribution and settlement for the non-traditional ATM functions. Concord also is providing gateway service to all the electronic payment networks, as well as Visa, MasterCard, Discover and American Express. On a monthly basis, Concord will facilitate revenue splits, and provide activity reports on the month's transactions

In the iATMglobal program, the content providers pay fees to participate; the fees are then split among NCR, the deployer and the site owner. "The revenue split is similar to the surcharge," Hewitt said, with merchants who assume a bigger responsibility for the machine, such as filling it with cash, getting a larger cut than those who do not.

Selling it

Welch Systems is just beginning to install toppers bearing the "Cash & Shop" logo created by NCR to help promote iATMglobal. "I think the single biggest issue is going to be getting customers to realize the different services are available at the ATM," Hewitt said.

He believes that attaining dense ATM coverage is the single best way to promote the services. "You want people in a certain metro area to go up to an ATM in a c-store and expect to be able to do all kinds of different transactions on that machine," he said.

Straub said that geographic density is "one of two kinds of ubiquity that matter in this business," with the other being based upon the venue. For example, Straub said, "It's nice to walk into a Mobil station and expect to get all of the same things in the Mobil down the street as you do at a Mobil anywhere else."

While transactions thus far have been "very low," Hewitt said, Welch Systems is just beginning to promote iATMglobal through direct marketing such as the toppers and incentive programs for merchants.

"This isn't going to set the world on fire the first year," Hewitt said. "Chances are, it's going to be a lot like the ATM when it was first introduced. It took people a while to catch on to it."