January 2004 Edition
ATMs Increase Spend

Few can imagine life without ATMs (Automatic Teller Machines) or the networks that have been created to drive the transactions. 2003 marked the 30th anniversary of the ATM patent and for the past three decades businesses and consumers alike have seen great advancements in ATM technology, as well as changes in the companies who deliver that technology.

The first ATMs were on-site at financial institutions and could only be used by that institutions' customers, soon financial institutions began conversing with each other and local networks, followed by national networks (Plus, Cirrus), emerged to service the demands of the mobile customer.

At one time the big banks were the only ATM providers, but in the 1980's PC based technology allowed for the manufacture of a low-cost ATM, and this spurred the growth of the ATM industry. Independent Service Organizations (ISOs) grew and in 1996 Cirrus and Plus allowed surcharging, and off premise deployment exploded. This was a tremendous boon for the retail economy, as people no longer had to visit a bank or financial institution to take advantage of ATM service.

For the restaurant industry the convenient location of an ATM machine nearby can greatly enhance sales. Not surprisingly ATM customers, customers who have access to their money, spend more - on average 20-25% more - than non-ATM customers.

Clearly customer accessibility to cash is an important consideration for the operator. However, until recently the only way to get an ATM installed in your premises was to get one from the local bank who owned the ATM.

Traditionally the bank paid to rent space for the ATM and/or shared a portion of the transaction revenue with the business owner. But the opportunities for bank installed ATMs were, and still are, few and far between, as banks are very selective about choosing their retail locations and often seek to partner with large chains or businesses with whom they already share banking relationships.

In light of this, many operators have installed ATMs through ISOs (Independent Service Organizations), to ensure that their customers can access their money and then spend that money in the operator's establishment.

Larry Sturino, Regional Sales Manager for Access Cash Canada, a subsidiary of eFunds, notes that "Not only do ATM customers spend more, but having an ATM onsite increases the flow of customer traffic through your premises, an ATM is a convenience for the customer and is perceived as good customer service."

When customers have access to their cash they typically use it in place of credit cards or Interac. Says Sturino, "You can reduce your credit card and Interac usage by 25 percent, so you save on Interac and credit card fees."

Many ATMs also have advertising capabilities, and select models can display graphic advertising on the monitor or dispense promotional coupons, another way to encourage trial and further spending in your establishment.

Determining whether an ATM machine is right for your business involves a viability evaluation. "At Access Cash we offer several ATM programs. We have some customers who buy the machine outright, which allows them to maintain control and capture a more significant revenue stream from their ATM. But for those who don’t want the risk or the up-front investment, we have a program that allows you to use our fleet of ATMs and our management services." Sturino says.

And if an ATM is right for you, determining what type of machine will best suit your needs is also important. Ideally the machine should be inside your premises to allow customers to access their money safely, and adequate space must be provided for the transaction. Most machines are stand alone; however there are also countertop styles for those who cannot afford to relinquish valuable floor space.

Once you have elected to install an ATM, choosing a service partner that will support you after the sale is important.

"The relationship doesn't end after the ATM is installed." says Sturino. "We provide many services to help you get the most out of your ATM, we offer help desk support 24 hours a day, 7 days a week; transaction processing, network access, ATM monitoring, location reporting, vault cash management, multi-media products, training, service and maintenance."

According to ATMmarketplace.com, asking questions before the sale is important. They recommend asking about routine service and maintenance, service desk hours of operation, whether certified technicians are on staff, and they suggest contacting references to determine the track record of the ISO.

Can having an ATM make you rich? No, but it may improve your sales and it's a competitive advantage that ensures your customers don’t have to go looking for an ATM to get cash.

"It all boils down to 'cash on the floor', it's the key to getting new customers and increasing sales." Sturnio says. "An ATM in your establishment can help increase traffic and up average cheque sizes, making the convenience of cash profitable for you and easy for your customers." ¨

If you’re interested in purchasing an ATM machine, contact your Sysco Marketing Associate or AccessCash Canada at 1-888-211-3584 and identify yourself as a Sysco or Sysco iCARE customer.

A forerunner to the modern ATM was first introduced during the late 1930's in the state of New York. George Simjian came up with the idea of creating a hole-in-the-wall machine that would allow customers to perform financial transactions without the use of a bank teller. Beginning in 1939 Simjian registered no less than twenty patents related to the device and tried to persuade what is now Citicorp to give it a try. The bank piloted the new machine for six months, but did not see enough demand. (Today the estimated size of the Global ATM industry is U.S. $14-15 billion*). (*Source: Tom Harper ATMmarketplace)