By Travis K. Kircher
ATMmarketplace.com
Daniel Stechow, Chief Operating Officer of Select-A-Branch, sounded pretty enthusiastic - at least by phone. He said he can't help it. His company is growing. Select-A-Branch is an ATM network, based in King of Prussia, Pa. In 2006, it launched with a unique business model based on patented technology that raised some eyebrows among financial institutions.
That's because the Select-A-Branch network can display user interfaces from multiple banks. When a user inserts his ATM debit card into a Select-A-Branch ATM, the machine is able to identify which bank the card belongs to and - provided the bank is a member of the Select-A-Branch network - display screens containing the bank's user interface, branding and advertising. "So effectively what we've done is allow a single ATM to become a point of transaction for an unlimited number of institutions, and each of them can then present a set of screens branded in their logo, their colors and their marketing messages and advertisements," Stechow said.
Banks and credit unions may have been skeptical in the beginning - after all, no financial institution (FI) likes the thought of sharing a terminal with a competitor - but Stechow insists that users only see advertising and branding from the bank that issued their card.
"I'm a Commerce cardholder," he said. "When I put my card in, all I see is Select-A-Branch to begin with and then Commerce. So to an extent, there's very little intrusion by other brands into the whole customer experience." Stechow said the numbers prove that FIs are quickly dropping their concerns and recognizing the value that such a network offers. With 16 major FIs now signed on - including big guys like TD Banknorth, Commerce Bank and PNC Bank - Stechow said Select-A-Branch is growing.
"We are in conversations with most of the other large brands across the country, and the small brands locally," he said. "So in a little over 18 months, we have indeed proven that the model works. They get to present their logo and their information on machines that they don't have to buy, sell, upkeep or maintain."
In addition to saving operating costs, banks can also benefit from additional advertising to users whose banks are not on the Select-A-Branch network. Transactions are surcharge-free to users with cards issued by participating FIs, but users of cards issued from nonparticipating members will be charged a fee. When this happens, the terminal will flash an ad indicating that the consumer would have saved money if he or she banked at any one of the participating members. The terminal can even print the contact info and Web address of the participating bank's site on the receipt.
"So imagine the value: I'm going to be able to specifically reach a noncustomer of yours, give you the ability to present them with multiple ads and put a physical piece of media in their pocket or wallet at the conclusion of the transaction," Stechow said.
Stechow stressed that FIs are not the only ones that benefit from the Select-A-Branch network. He said the merchants where the ATMs are located also reap rewards. To date, Select-A-Branch ATMs have been deployed in roughly 150 locations, including several Manhattan-based McDonald Corp.'s franchise locations and Pennsylvania Turnpike service plazas.
He said a deal has just been signed with Aramark Corp., a provider of corporate concessions, to include Select-A-Branch ATMs at 40 Aramark locations as part of a pilot program. Stechow said merchants benefit from the network in a variety of ways, not the least of which is through additional revenue. Merchants get a share in the profits and benefit from the increased foot traffic through the location - much of which comes from consumers with cash they are likely to spend on the merchant's goods and services.
Mark Smith is the Senior Value Added Reseller Manager at Triton Systems Inc., which partners with Select-A-Branch for the network's ATM hardware. He pointed out that Select-A-Branch ATMs generate considerably more transaction volume than regular off-premises ATMs. "An average Select-A-Branch ATM is doing anywhere from 3,000 to 6,000 transactions a month," Smith said. "The average on every other ATM in America is 325." Smith said merchants also benefit from cross-promotional advertising at the ATM. For example, Select-A-Branch ATMs at McDonald's can provide coupons for a free drink or an order of fries with each transaction.
"Traditionally - let's just say in the last eight or nine years - in the retail space, it's predominantly been that either the retailer is being promoted or a bank is being promoted," Smith said. "It's never been both. So I do think that this is unique in the way that they're bringing the marketing aspect to this." Smith said this type of marketing - which he said is likely to convince more consumers to spend money at the merchant location - wasn't possible until ATMs began the migration from Operating System (OS)/2 to Windows.
For now, Stechow said he plans to continue petitioning more FIs to sign on to his ATM network. Along the way, he said his company will tinker with new ways to increase revenue at the ATM. One such way is by incorporating digital signage above the ATM to provide another opportunity for FI advertising and branding.
"The idea is that I can do full-motion video both on the upper screen as well as on the transaction screen," he said. "So when I go up and put my card in as a Commerce customer, I can have a Commerce logo up here above me so that people behind me know that here's another satisfied customer."
Stechow hopes the digital signage idea will lead to increased ad revenues. "I think that the market is responding in every aspect, so I think that we're going to be a multi-thousand location network within a handful of years," he said.
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