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New transactions happening 'one ATM at a time'

Service providers interested in offering new transactions at the ATM are counting on an army of ISOs to help them move their products into the marketplace. The troops appear to be mobilizing.

September 3, 2003

The number of non-bank ATMs currently offering services other than cash withdrawals is small -- no more than 1,000 terminals -- but many expect it to grow rapidly with more retail-oriented manufacturers and transaction processors coming on board to support them.

Ron Ferguson, executive vice president of transaction provider Euronet Worldwide, said his company now offers prepaid phone top-ups on 50 ATMs in 17 states, most of which came "live" this month. Euronet's top-ups are branded PaySpot.

"It's going to happen one ATM at a time," he said. "We're on the front end of bringing this thing live, but it gets easier all the time."

Core Data/Concord EFS is driving the initial group of ATMs, all of which are Tritons, Ferguson said. However, he expects Core Data to complete certification for top-ups on Tidel machines by the end of this month.

Core Data/Concord is currently working with Wincor Nixdorf to certify the top-up transaction on its ATMs, Ferguson said, and other processors are in the process of certifying PaySpot top-ups as well, including Genpass Technologiesand Innobeta, which is certifying PaySpot top-ups on NexTran ATMs.

Euronet has signed contracts with 25 ISOs, which manage some 25,000 ATMs between them, Ferguson said.

Catching the Waves

PaySpot prepaid phone top-ups are one of three initial transactions offered through Triton'sWaves program, along with CashWorks check cashing and Western Union money transfer.

Anita Nobles Arguelles, Triton's marketing director, said prepaid top-ups and/or check cashing are being offered on more than 100 Triton ATMs. Twelve Triton distributors have signed contracts with Euronet and CashWorks, she said, with approximately 20 more agreements pending.

According to Arguelles, CashWorks transaction volumes have been increasing at better-than-expected rates, with an average of 43 CashWorks transactions per unit per month.

"The added revenues are equal to about 90 regular cash withdrawals," she said. "You can see why we are excited, and why this is so positive for the merchant and the ISO."

It's too early to gauge volumes at ATMs offering prepaid phone top-ups, she said.

In an article in Convenience Store/Petroleum magazine, Tom Horey, chief financial officer for the Plaid Pantry c-store chain, said that two of his stores are cashing an average of 100 checks a month at Triton ATMs, three months after adding the service. Horey said he intends to add CashWorks to at least 70 of his 91 stores with ATMs.

Neil Johnson, president of ISO International Merchant Services, offers CashWorks on "a few" of his 3,000 ATMs. He has experienced drops in volume at some of them, a problem that he attributes to merchants who cash the checks themselves rather than doing so via CashWorks after they develop a "regular" check cashing clientele.

Despite this issue, Johnson intends to add more CashWorks locations, as well as prepaid top-ups and hopefully money transfer. "Every incremental dollar helps," he said.

Ken Rees, president of CashWorks, said check cashing is now being offered at more than 500 locations, the majority of them using TidelATMs. He expects the number to grow, as more manufacturers sign partnership agreements with CashWorks.

Tidel was the first to partner with CashWorks in early 2002 -- and invested $500,000 in the company. Triton added CashWorks to its Waves program in October of 2002, and Tranax Technologies and NexTran inked agreements with CashWorks this summer.

Check cashing and beyond

After a successful pilot at 25 ATM sites in the first half of 2002, Tidel began loading all of its new ATMs with software to support CashWorks in June of 2002. 

Mark Levenick, Tidel's president and chief executive, said that any new ATM transaction must be relatively trouble-free for its distributors to support.

"When we go out into the field, even in beta, we want it to be darned closed to the finished product. It shouldn't require a lot of hand holding or extra upkeep to support," he said.

Also important, Levenick said, is the ability for software changes to be made dynamically. A deployer wouldn't want to visit an ATM any time a cellular carrier's name changes, for example.

Levenick confirmed that PaySpot prepaid top-ups will be offered on Tidel ATMs soon. The manufacturer is also working with Western Union. Tidel plans to exhibit several new value-added transactions at this year's NACS show, Oct. 12-14 in Chicago, he said.

Any new transactions that Tidel supports must be similar in length to a traditional cash withdrawal, offer a reasonable amount of revenue to the ISO and the retailer and be sustainable on ATMs with limited processing power, Levenick said.

Triton's Arguelles said that market research and distributor feedback are the two biggest factors in selecting Waves transactions. "Those two factors will typically drive our partners to develop them," she said.

Going iATMglobal

Robb Straub, head of NCR's iATMglobal, said that all new transactions are driven by market research. "Will the consumer buy it at a self-service terminal? That's all that really matters."

Eight deployers, including one financial institution, are offering iATMglobal services, which include prepaid phone top-ups and prepaid long distance through bcgi, Radiant Technologies and MCI WorldCom; online movie tickets through movietickets.com; online flower sales through Flowers USA; and sales of CDs, gift certificates and other products through Sony Music.

Brian DuCharme, senior product manager for bcgiPayment Services, said that bcgi prepaid top-ups are now available on 250 ATMs, including machines under agreements with both iATMglobal and E*Trade Financial.

E*Trade is driving all of the prepaid transactions through its Postilion switch, a platform provided by Mosaic Software. It's far easier for deployers with their own switch to add new transactions such as top-ups, DuCharme said.

The varied mix of ATM hardware and transaction processors used in the ISO world has added another layer of complexity to introducing new functionality, DuCharme said.

It will be easier to add new transactions on Windows-based platforms, he said. All of the major retail-oriented manufacturers have either already introduced machines based on a Windows platform or plan to do so in the coming months.

Two more deployers, including another bank, will sign iATMglobal contracts by month's end, Straub said.

Deployers' agreements are with iATMglobal rather than with individual service providers, Straub said. This arrangement was made after deployers said that signing multiple contracts was "a rather onerous obligation on their part."

Straub said that iATMglobal also is the only provider that offers ATM users the option of using an ATM/debit card or a traditional credit card to pay for their transactions. A significant number of consumers purchasing prepaid top-ups at iATMglobal ATMs have opted to use credit, he said.

Like some others, Straub said he thinks the industry is "over the hump" when it comes to introducing new ATM transactions.

TranAccess trend

Tranax Technologies introduced its advanced functionality program, called TranAccess, to its distributors last month. Like Tidel and Triton, the initial transactions offered will be CashWorks check cashing, Western Union money transfer and prepaid phone top-ups.

Unlike the other two manufacturers, however, Tranax intends to work directly with prepaid phone providers rather than with a consolidator like Euronet or bcgi.

"We want to increase the profitability for our distributors and their customers by removing the middleman," said Eric Sternberg, Tranax's vice president of marketing.

Tranax opted to work with CashWorks and Western Union, Sternberg said, because their better-known brand names lend credibility to new transactions.

Check cashing and prepaid top-ups are currently in beta, Sternberg said.

Not all Tranax distributors are happy with Tranax's decision to go its own way on prepaid top-ups.

"I would have liked to see them go in with the other manufacturers to help establish a brand," said a Tranax distributor who wished to remain anonymous.

Neil Clark, vice president of marketing for ATM Express, Inc., believes Tranax's decision will have little impact, provided they can get the same carriers and offer commissions similar to those provided by Euronet and bcgi.

Tranax intends to offer the new transactions on its newly introduced MiniBank 2150/2250, which replaced the MiniBank 2100/2200. Those machines will be upgradeable to the MiniBank 2500, with the addition of a 10.4-inch LCD screen and a Windows XP embedded operating system.

While the PC-based platform is not necessary to run TranAccess transactions, Sternberg said, it offers "more sophisticated screen handling, a much improved user-interface and increased application size, which opens the door to future development of advanced applications."

While TranAccess transactions will ultimately be available across the Tranax product line, Sternberg said, the rollout will begin with the 2500.

The anonymous Tranax distributor also questioned Tranax's decision to initially offer TranAccess only on a new, high-end model when other manufacturers offer advanced functionality on all of their machines, including entry-level models.

"This stuff is hitting the streets now. Our sales reps are facing presentations where merchants are being offered things like phone top-ups today," he said. "We're going in there telling them about what we can do for them on a future model."

However, Clark thinks that Tranax will be ready when advanced transactions truly hit the marketplace. "In theory, they were available a year ago. In reality, they were available two weeks ago," he said.

Getting with the program

All new Triton 9100, 9700, 9800, RL5000 and FT5000 models are loaded with Waves software, said Triton's Arguelles. Upgrade kits, with software to support both Waves and Triple DES, are available for the 9600 series.

Tidel supports new transactions across its 3000 series and will offer upgrades for the Ignition series that will be packaged with a Triple DES upgrade, Levenick said.

Straub said that software to support iATMglobal transactions is included on NCR's EasyPoint ATM models whether they run on NDC or @tmEase software. It can be added to any fourth generation or later NCR ATM by request.

NCR expects to add an iATMglobal client to its APTRA software by year's end. This will make it possible to offer iATMglobal transactions on other vendors' hardware, Straub said. 

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