News

Riding the Me2Me wave

In today's environment of stagnating and even shrinking transaction volume per ATM, Dove Consulting's Beth Costa and Richard Crone say that new services such as interbank funds transfer can be the difference between a profitable and unprofitable ATM location.

April 29, 2002

Beth Costa

Easy money movement between accounts at different financial institutions has been an elusive goal for consumers.

Their alternatives have been primarily limited to the slow process of checks or expensive wire transfers. ACH, or electronic transfers -- although a common procedure for corporate accounts -- are either not widely available or not promoted to individuals.

But online account aggregation promises to alter the funds transfer playing field. Driven by consumer demand, aggregation is swiftly moving beyond current view-only functionality and has set the stage for promoting money movement between accounts at other institutions.

In fact, a recent Star Systems survey of online households reported that 89 percent said it was very or somewhat important for an aggregator to offer this service.

As consumers come to expect their financial institution to support interbank transfers at their Web site, they will also demand this functionality at ATMs.

Richard Crone

Another recent study, sponsored by NYCE Corp., found that almost 40 percent of consumers are interested in performing interbank funds transfers at ATMs. In fact, there are already several initiatives underway to bring Me2Me money movement functionality to ATMs.

Account aggregation will highlight for consumers and small businesses the "timing" and "price" gaps that exist in the market today between paper checks, ACH and wire transfers. ATM networks are perfectly positioned to fill this pricing and settlement gap and seize the new revenue opportunities that some sources estimate at more than $1 to $2 billion annually.

But the approach selected will dramatically impact your profit equation, your settlement risk and consumers' motivation in conducting Me2Me funds transfers at your ATMs. Understanding the options and their benefits are a critical aspect of adding incremental and profitable transactions to your ATM network.

Dove Consulting is a Boston-based strategy firm specializing in market growth strategies and organization effectiveness. Dove's Financial Services practice is renowned for its expertise in e-payments, retail banking and distribution, and Internet and online financial services. American Express, Bank of America, Capital One Financial, Charles Schwab & Co., Diebold, eBay, S1 Corporation, and Boeing are among the clients served by Dove.

Dove's Richard Crone and Beth Costa help large financial services institutions apply online account aggregation and other new technologies to open up new spaces for growth.