The Leading Edge: Advanced ATM Functionality By Tommy Glenn
n enormous amount of discussion has occurred over advanced ATM functionality. Our industry would be in the midst of a huge wave of new and well-received ATM applications had they caught on as well as discussions about them. Everyone, from software giant Microsoft Corp. to the local merchant who purchased an ATM last week, has an opinion on what will and won't work and why.
The information can get confusing very quickly except for two consistencies. First, no one has found an ATM application that truly lives up to its proposed potential. Second, the only functionality that consumers currently expect from an ATM is what it has always provided: cash dispensing services.
My experience stems from taking part in building one of the larger ATM networks in the United States, both as a private independent company and now as part of a larger public financial institution. I begin with two disclaimers. First, I will borrow a quote from Harold Geneen and Alvin Moscow's book, "Managing" (Doubleday Books, 1984):
The reliability of the person giving you the facts is as important as the facts themselves. Keep in mind that facts are seldom facts, but what people think are facts, heavily tinged with assumptions.
Also, keep in mind that our primary focus as a company has always been on the small footprint, cash-dispensing ATMs versus the larger, more expensive ATMs usually associated with financial institutions.
In our 10-year history as an ATM ISO, we have tried several approaches to what is now called advanced functionality. First we tried multicassette units that dispensed preprinted, prepaid long distance cards and sheets of U.S. postage stamps. While the technology worked, consumer demand was lacking. We ended this initiative not only because of lack of use but also difficulty in managing inventory.
I think the only sales generated were from occasionally curious employees using the ATM at the deployed location or our own associates trying the services after encouragement from our staff. Our largest day of stamp distribution occurred when someone broke into our office and stole the stamps from our controller's desk.
After working several months with manufacturers, potential product and service providers, processors, and other ATM ISOs, we made a second attempt. It was to create a solution that didn't require inventory, could be maintained at the ATM or through the "backroom" ATM support software, and would enable handling the entire transaction electronically.
With the help of all the aforementioned organizations, we deployed approximately 200 ATMs offering certain services from Western Union and dispensing prepaid wireless minutes from the receipt printer.
From the equipment point of view, these transactions worked. We even had a few customers interested in purchasing these services. However, we had several problems with delivery of the prepaid product. The processors and networks could not approve the transactions, which dampened the already small number of potential customers.
We did, however, experience a modicum of success with the Western Union transactions. This functionality is now part of our current offering; we include it on approximately 400 ATMs, and it continues to drive a small number of transactions. I believe the small number results from lack of consumer awareness and understanding of the functionality and the requirement of a bank account to conduct the transaction.
Even with these less than successful attempts in our back pocket, we continue to work with the parties involved in our industry to create additional ATM functionality. One current project is to enable a low cost, small footprint ATM to accept deposits electronically, using check imaging technology. The opportunity is that the established current user base already knows how to use a very similar service. They are familiar with the delivery channel, and they will find that additional locations offer quicker access to their funds.
Another advantage is the compensation system already in place through ATM networks and financial institutions. This system might make it easier for electronic deposits to catch on as an effective service for both the cardholder and financial institution and as a source of revenue for the ATM owner.
I am still a believer, maybe not in all the products and services, but in the potential for the ATM to be more things to more people. I also know we have some hurdles to overcome to make advanced functionality at the ATM a more integral part of our everyday experience.
We need to provide products and services that consumers want. We also need to have a distribution system that benefits all involved parties. In order to change consumers' current habits, we have to create awareness of the new distribution system and show them the benefits. If a new ATM offering meets these challenges, we will find success with advanced functionality. As with all new things, only time will tell.
Tommy Glenn is President of Fort Worth, Texas-based NetBank Payment Systems (NPS). Glenn serves on the Board of Directors for ATMIA, the ATM Industry Association. He is also on the Board of Deliver Me, a service group that provides food, shelter and clothing for the elderly. E-mail him at
tommyg@netbank.com, or call him at 817-334-8871. NPS, formerly Financial Technologies Inc. (FTI), is the nation's third largest ATM deployer and the single source provider for payment processing solutions. The company offers a full range of ATM products and services. NPS is a wholly owned subsidiary of NetBank, the first commercially successful Internet bank. Visit NPS' Web site at
www.netbankpaymentsystems.com .
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