The Broken Link - Digital Transactions

Prepaid gift cards, meanwhile, need
alternative means of distribution. Sales
of gift cards in 2006 amounted to $80
billion, according to TowerGroup, and
there are more than 660 million openloop
(Visa- and MasterCard-branded)
and closed-loop cards, according to
Mercator Advisory Group Inc.
There are only three methods to
buy gift cards today:
Over-the-counter purchase at
the desired merchant;
Via the J-hook card malls at
mass merchandisers and convenience
stores;
Over the Internet.
All three are relatively inconvenient
for the purchaser and a hassle
for the seller in terms of activation,
stocking of cards, dealing with growing
security and activation issues, and
the labor cost involved.
ATMs offer a more convenient,
secure, and economical gift card distribution
option for both businesses
and consumers. As has been repeatedly
demonstrated for more than 35
years, consumers prefer the time-andplace
convenience-value proposition
in the dispensing of value media.
Imagine the scene during recent
holiday seasons, with people trying
to buy gift cards for family, friends,
and co-workers at retailers and other
merchants with J-hook card malls:
Crowds of people sorting through
racks of cards, long lines of people
trying to pay for the cards and to get
them activated, and frustrated checkout
clerks and customers.
Compare this scene to driving or
walking up to an ATM that features
a gift card of the merchant at that
merchant’s location or an ATM that
features the gift cards of various retailers,
inserting your payment card, and
selecting the number of cards you
wish. The consumer has none of the
hassle, but experiences added value
with a premium or coupon attached to
the card for use by the purchaser. No
security or fraud worries as the gift
cards are contained in a locked safe
within the ATM so no one can photograph
the serial or account number and
use the number shortly after the card
has been purchased and activated.
Dispensing Value
Better ATM Services’ card medium is in
the form of a matted, plastic card sheet.
It is slightly more than 3 inches wide
and 6 inches long and about half the
thickness of a normal embossed card.
The card sheet comes
in three panels that are
easily snapped apart.
Each panel can consist
of a card, premium coupon
and/or advertising
and promotion. Prepaid
card processor Comdata
Corp. cites studies that
show about 80% of gift
card purchasers will
choose a gift card that
offers a value premium
to the purchaser over
another that has no premium
offer.
Dispensing possibilities abound.
Though Better ATM’s business model
is an enabling model via its patents and
does not directly compete with either
industry’s participants, the company
has launched five beta ATM sites in restaurants
in the greater Phoenix area to
test real-world acceptance. The ATMs
dispense both cash and the restaurants’
gift cards. All cards have a premium
offer for a free appetizer, desert, or
value premium for food and drink.
National retailers have inquired
about having their prepaid cards distributed
through financial institutionand
ISO-owned ATMs as well as
ATMs in shopping centers dedicated
to distributing gift cards of the mall’s
client tenants to save them the hassle
of selling and activating cards over
the counter—especially during the
holiday season. Packaged-goods firms
have inquired about coupon space and
paying a fee to the ATM distributor.
Others see opportunities for ticketing
for sporting events and concerts.
Honey: ATMs are wellsuited
to deliver products
like prepaid cards.
Card panels can consist of the admission
ticket and prepaid value for
refreshments once inside the venue,
along with a collector’s photo of a
marquee athlete or performer.
Transit-pass applications are obvious,
especially with the opportunity
for providing safety announcements
and advertising—thus enhancing revenue
opportunities.
Another interesting concept was
recently advanced
from overseas in
which certain airlines
will sell a “fast-track”
pass for passengers not
wanting to wait in long
lines to pass through
security. Selling such
passes via the ATM
is viewed both as an
opportunity to reduce
the size of queues at
check-in counters and
to promote shopping
once inside the security
zone.
These are simply a few of the possible
applications for increasing transaction
volume and delivering value to
consumers with time-and-place convenience.
Better ATM Services’ licensed
and certificated participants are free to
create their own offers and pricing, and
operate within current or newly formed
market and operating infrastructures.
The ATM remains the most frequently
used delivery channel for banks
and for fulfilling consumer demand
for cash. Now, delivery of other value
forms is possible in large numbers, not
only for banking, but also for retailers,
packaged-goods manufacturers, sport
and entertainment purveyors, and the
public sector, providing opportunities
for additional revenue and further
expansion of the versatility and popularity
of ATMs. DT
Thomas Honey is chief development
and marketing officer at Better ATM
Services Inc., Mesa, Ariz. Reach him
at tom@betteratmservices.com.
22 • digitaltransactions • February 2008