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Tranax moving forward with flexibility

At the recent Tranax distributor's conference, the company introduced the two new ATMs that are key to its future strategy: the Mini-Bank 1500 and 2500. Both are designed to offer more flexible configurations than any previous Tranax models.

August 28, 2002

Hansup Kwon does not want to end up as the Packard Bell of the ATM world.

Kwon, the president and chief executive officer of Tranax Technologies, in his address at last week's Tranax Distributor's Conference likened today's ATM industry to the PC industry of a decade ago. The intense competition and downward price pressure that characterize today's retail ATM market tore through the PC business in the early '90s, crippling companies like Packard Bell while strengthening others like Dell.

The companies that failed, Kwon said, sold on the basis of price alone. "I call these companies box movers," he said. "Instead of emphasizing values such as product quality, innovation or customer support, they bent to outside pressure."

Kwon made it clear to the 70 or so distributors in attendance that he wants to position Tranax as a company that thinks outside the box rather than as a box mover.

New direction

In June, Tranax introduced the Mini-Bank 1500, a machine that in contrast to previous Tranax models can be built to order. It replaces the Mini-Bank 1000, which was discontinued earlier this year, and the Mini-Bank 2100, which will disappear by year's end.

Tranax thinks the new Mini-Bank 1500, seen here, will account for at least 80 percent of its future sales.

Tranax has already begun shipping the five 1500 configurations that it anticipates will be most popular among its distributors; 19 more should be available by year's end.

"This is a totally new deal," said Bill Dunn, Tranax's director of sales, noting that flexible configurations offer distributors opportunities to up-sell that weren't possible with Tranax's previous product lineup. So, for instance, if a location has higher-than-expected transaction volumes, a distributor can sell a second cash cassette. Or a merchant might opt to move from a manual lock to an electronic one.

Dunn said the 1500 features a combination of components manufactured by Tranax business partner Hyosung Computer that are interchangeable with the 1000 and the 2100. "There is a commonality of parts and error codes that will allow (distributors) to stabilize their service departments and parts inventories," he said.

All configurations of the 1500 include an audio jack for voice guidance capabilities, which are expected to become a requirement for ATMs under a pending revision of the Americans with Disabilities Act (ADA). Another standard feature is an Encrypting PIN Pad (or EPP) to fulfill MasterCard's mandate for Triple DES encryption. The card reader has been changed from a swipe to a dip, to allow for the possible future use of smart cards.

"(Kwon) is absolutely adamant that what we sell will be compliant," Dunn told the distributors. "If we do it now, the costs to upgrade later will be minimized."

Among other new standard features: a roller on the printer to reduce paper jams, a 56K modem for faster remote monitoring, a recessed keypad to help prevent shoulder surfing and a ¼-inch-thick steel bottom plate to make it more difficult to remove an ATM from the floor by rocking it. It also weighs a fairly hefty 269 pounds, also to discourage theft.

Tranax expects the 1500 to become its flagship product, Dunn said, accounting for at least 80 percent of future sales. Dunn believes the cost is about $300 more than the Triton 9100, which he said Tranax sees as its biggest competitor.

Still to come

Several distributors kick the tires on a Mini-Bank 2500, the PC-based model Tranax plans to introduce in the fourth quarter.

In the fourth quarter of this year, Tranax expects to introduce the Mini-Bank 2500, a machine seen for the first time at the conference. It will be Tranax's lowest-cost PC-based model, priced several thousand dollars less than the Mini-Bank 3000.

It will offer more functionality than the 1500, Dunn said, giving distributors the opportunity to take advantage of developing ATM applications like ticketing and prepaid cell phone top-ups, both of which were demonstrated at the conference.

The 2500 will run on a Windows CE operating system, which is "more friendly than NT," Dunn said. "You can pull the plug on CE, plug it back in and it will fire itself back up. You can't do that with NT."

In addition, Tranax plans to offer an upgrade kit consisting of a 10-inch color screen, bezel and PC board that can be used to essentially convert any Tranax machine in the field into a 2500. According to Dunn, the company plans to sell the kit for less than $2,000.

Several Tranax distributors believe the upgrade paths of the new machines will be a strong selling point. "It's vertical marketing," said Rick Westenberger, president of Holiday, Fla.-based Amer-e-com Digital Corp. "It's a chance for me to have another conversation with a customer who's already happy with me."

Westenberger said he intends to consult with his financing company to find out whether the upgrades could be rolled into merchants' existing ATM leases or financed under a separate lease.