The Broken Link - Digital Transactions

Changing consumer behavior regarding the multifunction kiosk is
another longer-term proposition that may have to go through a few more
intervening stages before consumers are willing to switch from their
comfort with the ATM. Cardtronics Inc.’s decision, therefore, to cease
further deployment of kiosks in 7-Eleven Inc. stores is no surprise. As
one long-time industry colleague has observed, “The kiosk is a Stage
Four solution in a Stage Two world.”
ATMs thus remain at the vanguard of America’s current self-service
surge. This is especially true for younger adults who are more technosavvy
than their parents and grandparents. Nevertheless, multiple generations
are looking to the ATM for extended self-service functionality
that meets their need and demand for time-and-place convenience
value beyond cash access.
ATM manufacturers have responded with newer, more innovative
machines that enhance the deposit process, add bill-payment features,
include more account-transfer options, and expand screen views for
additional promotions and service choices. With newer equipment,
depositors can now get a digital image of deposited checks and currency
(“Pushing the Envelope Aside,” November-December, 2006).
Deposited checks can be cleared more rapidly via the Check 21 option.
While such innovations further connect the consumer with the financial
institution, they hardly add to functional dependency and transaction
volume—especially for off-premise ATMs.
Getting Gift Cards
Increasingly, today’s ATM world needs to connect the consumer with
non-banking businesses and public services for transaction growth
and new revenue streams, and to attract new customers. Among early
attempts in the dispensing arena have been the dispensation of postage
stamps, targeted coupons for U.S. convenience-store customers,
e-ticketing of airline and railroad fares, dispensing of transit passes, and
topping up of mobile phones in some parts of the world. Uncertain consumer
need and acceptance of these applications in the U.S. are likely to
keep demand and volume low.
The union of ATMs and prepaid cards could prove to be a marriage
of convenience in this challenging environment. Dispensing of non-cash
media from ATMs may hold some real promise for incremental ATM
transaction growth—especially for prepaid gift cards, tickets to events
and venues, and other forms of value representations.
Tranax Technologies Inc. recently announced the dispensing of a prepaid
card from a $3,000 sidecar add-on to its ATM. And, in September,
Better ATM Services announced a program for licensing its patent and
patented card technology to ATM and prepaid card industry participants,
enabling prepaid card dispensing from an ATM’s cash tray, as with currency.
Thus, a marriage of convenience is created for both industries.
ATMs are the most secure, trusted, cost-effective, and convenient
device for unattended banking and commerce. According to an ATM
Industry Association study, more than 75% of adults ages 18 and older
regard the ATM as an essential part of their daily lives compared with
56% for e-mail and Internet access. In addition, ATMs are a more costeffective
option for customer-activated transactions, with less than a
fourth of the cost of transactions carried out by human tellers and clerks,
according to a 2004 report by TowerGroup Inc.
February 2008 • digitaltransactions • 21