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ATM Trends Indicate Opportunities for Financial Growth

By Tommy Glenn

Recent trends in the following areas within the off-premise ATM business indicate improved current and future financial opportunities for ISOs and merchant level salespeople (MLSs) who choose to enter the ATM marketplace.


Since the ATM industry's inception, ATM manufacturers have continued to improve performance and features while lowering an ATM's base cost.

When we at NetBank Payment Systems started in the industry approximately 10 years ago, the first ATM we purchased from a manufacturer cost $10,000.

At that time it was probably 60% less expensive than anything else in the marketplace.

Now there are units from most manufacturers available at wholesale prices below $3,000. The expectations are that manufacturers will introduce even more cost-efficient ATMs before the end of 2005.

For those of us looking for opportunities to grow our ATM network, the benefit is obvious: advanced technology at a lower cost.

This trend also has an accelerating effect on our ability to deploy additional ATMs because it lowers our base operating cost and makes it easier to achieve profitability on fewer transactions.


The second trend that continues to sustain the growth opportunity for the off-premise ATM business is related to telecom.

While prices for both traditional landlines and wireless service continue to fall, the technical capabilities and opportunities for both continue to grow.

We will probably see a shift to wireless for most, if not all, off-premise deployments in the near future as prices decrease and wireless technical and service capabilities continue to improve.

This will not only reduce the cost of deploying and maintaining the ATM, but it will also make the installation process simpler, more efficient and cost effective. An added benefit is much improved customer transaction times.

Transaction Processing

A trend that we will most likely see continuing into the foreseeable future is the reduction in transaction processing costs. Transaction processing has seen significant changes in the last 10 years.

The changes in processing costs are the result of a number of factors, some obvious and some not so obvious.

One is the overall growth of the off-premise ATM market accompanied by the growth of this market as a segment of the overall ATM market.

This trend may have slowed slightly, but it continues to affect pricing.


Mergers and acquisitions within the industry have left more pricing power in the hands of those remaining in the business. This is another opportunity to reduce operating costs and make more ATM sites potentially profitable with fewer transactions.

In addition, several other trends, typical of any maturing industry, are also affecting and improving the off-premise ATM opportunity.

These include increasingly efficient operations on the part of the major industry players, more cost effective and efficient distribution methods and better, more stable regulatory guidelines.

All these trends point to a maturing market. Although the off-premise ATM business grows more competitive and "cost efficient" than in the past, it still holds immeasurable financial opportunities for ISOs and MLSs who understand the business and can execute well.

If you have any questions or comments about this article or suggestions for future articles, e-mail me at . I look forward to hearing from you.

Tommy Glenn is President of Fort Worth, Texas-based NetBank Payment Systems (NPS). Glenn serves on the Board of Directors for 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, 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 .

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