Super ATMs Coming to a Location Near You

Here is a story about a machines that don't do nearly as many things as our new CCARDS machines will do. We like these machines being out there in the marketplace because people become accustomed to using machines to perform banking tasks previously done only with person to person contact in a traditional bank. Story follows:



Hat Tip: Digitaltransactions.net

(May 8, 2008) Non-bank ATM network operator Cardtronics Inc. has been trying to pump up transaction volume on its advanced-function Vcom machines ever since it bought them last July from 7-Eleven Inc. as part of the 5,500-machine ATM fleet the convenience-store giant unloaded for $137.3 million. Next week, part of that strategy takes effect when the 26 million members of credit unions belonging to the Co-Op Financial Services network will be able to make envelope-less deposits at the machines.

The 2,200 Vcoms, manufactured by NCR Corp. and located in 7-Eleven convenience stores, are capable of imaging checks, sparing the depositor of the need to enclose checks in and fill out a deposit envelope as is required for a traditional ATM deposit. Jack Antonini, president and chief executive of Houston-based Cardtronics, revealed the pact this morning at Cardtronics’ first-quarter earnings conference call. He also mentioned Cardtronics’ previously disclosed deal with another credit-union network, Financial Services Center Cooperatives Inc.

“Between the two of them, 30 million customers will now be able to make deposits 24 hours a day,” he said, adding that “we’ve got another very large bank in the queue.”

Jim Hanisch, executive vice president at Rancho Cucamonga, Calif.-based Co-Op Financial Services, tells Digital Transactions News that the Cardtronics deal helps put credit unions at the forefront of a new banking service in which most of the headlines have gone to giants such as Bank of America Corp., Wells Fargo & Co., and JPMorgan Chase & Co. Co-Op first began testing an image-capable ATM at California Center Credit Union in November 2005 (Digital Transactions News, Dec. 7, 2006). Some 150 of the network’s 5,400 ATMs now offer imaged deposits. “We’re beyond test,” says Hanisch.

Co-Op and Cardtronics did not disclose revenue arrangements, but the credit union to which the depositor belongs will pay interchange to Cardtronics as the ATM owner, according to Hanisch. The Vcoms are Citibank-branded, but Citi won’t be a party to the transactions.

While there have been some reports of imaging ATMs not working as they’re supposed to, Hanisch says Co-Op’s members have had few problems. The advantage for consumers is faster deposit verification and access to funds. For deployers, imaging ATMs need less servicing than traditional models. Hanisch says deployers typically send couriers to pick up checks from imaging machines only once or twice a month compared with daily for regular ATMs. “The hardware is relatively expensive, but it also changes the service dynamics for the ATM and it also makes it substantially more viable to place an ATM in an off-premise location for deposit taking,” he says. Co-Op also is working on a home-based deposit-capture service.

Cardtronics will be promoting image deposit as it seeks more business from financial institutions. “It’s an area that has a lot of banks very, very interested because it’s a cost saver and it’s a significant convenience improvement for their customers,” Antonini said.

The underperformance of the Vcoms contributed to Cardtronics’ first-quarter loss of $4.59 million, up from $3.45 million in the 2007 period. The Vcoms generated operating revenues of $1.24 million but had expenses of $2.27 million. Cardtronics is trying to reverse the Vcoms’ losses through cost reductions from contract renegotiations, bringing outsourced service functions in-house, and replacing low-volume Vcoms with traditional ATMs in some 7-Eleven stores. To build transaction volume, the company will concentrate its Vcom advertising efforts in about 15 major cities. Marketing efforts will highlight the Vcoms’ functions, which, besides imaging, include electronic bill payment.

Co-Op recently signed deals giving its 2,800 credit-union members’ depositors surcharge-free access to 350 Cardtronics machines in Costco Wholesale Corp. stores and all Walgreen Co. drug stores in Florida.

Meanwhile, boosted in large part by the 7-Eleven deal, Cardtronics today said its average number of transacting ATMs increased to 32,475 in the first quarter from 25,228 a year earlier. Some 3,674 machines are in the United Kingdom and Mexico. Total transactions grew 87% to 83 million from 44.4 million. Monthly cash-withdrawal transactions per ATM grew to an average of 553 from 412 in 2007’s first quarter, good for a gross profit of $290 per machine compared with $224 last year. More than 9,500 machines sport bank brands, Antonini said. In those branding deals, the bank and Cardtronics work out revenue arrangements to replace the surcharge fees—Cardtronics’ chief revenue source of revenue—from surcharge-free transactions initiated by the partner banks’ customers.

In all, Cardtronics reported first-quarter revenues of $115.1 million, up 61% from $71.7 million in the year-earlier quarter. While it is still profit-challenged, Cardtronics doesn’t plan to raise its surcharges to $3 as some big banks have. “We have not made any moves that extreme; we’d be concerned about our transaction counts being negatively [affected] if we did that,” said chief financial officer J. Chris Brewster.

Technorati Tags: financial kiosk, remittance, electronic transactions

Automation is Washing Money Orders Away

Source: John Adams of Bank Technology News

"Prepaid cards are the new vehicle of choice among the unbanked who have long endured high money order fees. Payments firms better take note."

The amount of walk in payments for bills is decreasing in the face of more availability of stored value debit cards to the unbanked and underbanked. As people are able to transfer money to and from their cards at much less cost than the price of a money order and with more convenience the market movement is obvious.

Companies affiliated with International Personnel Management, Inc. (IPM) will maximize their entry into one of the fastest growing markets in the world.

Click here to read more.

Latin America is Ready for EMV Cards

From gtnews.com.

An excellent entry point to the Card transaction market with partnership from IPM.

Smart cards that comply with global payment standards are set to take the Latin American market by storm now that previous barriers to the adoption of EMV cards - high cost, the small card user base and lack of guidelines in the region - have been overcome.

The use of EMV cards (smartcards that comply with the global standard for payment systems) is exploding in some Latin American applications, such as prepaid wireless and closed-loop stored value cards. But the conversion from magnetic-stripe cards to EMV cards in the region's banking sector, which was loudly predicted five years ago, has not yet happened. InfoAmericas believes the region will see watershed change, with rapid EMV card adoption over the next few years.

Two important obstacles that stood in the way of this transition are now being overcome. The first was the lack of uniform acceptance guidelines in a region dominated by international banks. Until recently, there were no well-established specifications that could allow smooth adoption of the EMV standard across terminal platforms that vary from country to country. The second obstacle was the enormous cost of transitioning to EMV technology given the relatively small card base and its concentration in the affluent market. The benefits to financial institutions, retailers and cardholders were not seen as sufficient to justify the switch, especially considering that EMV cards are also more expensive to produce than magnetic-stripe cards. The market was stuck in a gridlock situation where no EMV terminals were being installed because there weren't enough EMV cards in circulation, and banks were not issuing EMV cards because there weren't enough terminals.

Debit and Credit Cards Reach Critical Mass

Now, however, sustained growth in the debit and credit card market has finally established the critical mass necessary to drive EMV implementation. Twenty-five million new credit cards have been issued since 2001, while the number of debit cards in circulation expanded by more than 30 per cent. This has created the economies of scale needed to support implementation of a variety of EMV card solutions and products.

Previously, the most compelling arguments for adopting EMV cards did not apply to the Latin American market. The card base was too small for issuers and retailers to benefit from the enhanced customer profiling capabilities that EMV cards offer. Fraud was also seen as insufficient justification, since until 2003 the incidence of card fraud in the region was among the lowest in the world.

Other less prominent factors also contributed to the reluctance to adopt EMVs. Many Latin American banks were in the midst of consolidation or acquisition, which was poor timing for any new technology. Banks were focused on expanding their market presence through expanded ATM networks and promotion of financial services. Retail loyalty programs were also limited, as a result of shaky economic recoveries and a generally unsophisticated and untested consumer market.

Fraud Reduction is the Leading EMV Driver

The Latin American card market has grown rapidly over the past few years as it shifted focus towards new lower socio-economic segments and multiple card possession. The expanding card base fostered an increase in fraud, which in turn strengthened the economic case for EMV card adoption. Although the fraud-loss rate in Latin America remains below 0.4 per cent, it is nearly five times higher than in the US market, and growing an alarming 12 per cent a year.

A recent InfoAmericas study revealed that only about half of the banks surveyed believed that the level of card fraud in their portfolios had already reached unacceptable levels. On the other hand, 73 per cent stated that, within the next three years, fraud levels will reach a point where they cannot be offset by portfolio growth, leading to the adoption of EMV cards. Pilot tests conducted by Visa indicate that counterfeiting can be cut by 70 per cent and fraudulent use of lost and stolen cards could be chopped by 90 per cent with EMV cards. Visa and MasterCard are also in the process of changing the rules that allocate responsibility for fraudulent charges, and they will apply these new rules to Latin America beginning in January 2006. After that, the cost of any fraudulent transaction that could have been prevented with EMV technology will be shifted from the card issuers to banks not using EMV.

The Largest Untapped Stored Value Card Market in the World

When reading this article from the Shanghai Star about the cash based economy of China and the desire or in fact the "imperative" of a card based economy, one realizes just how big an opportunity exists for stored value card provider companies.

Even though this article was written in 2003, one can realize that the extremely large and growing Chinese market is far from having a society where stored value and credit cards are ubiquitous.

At International Personnel Management, LLC (IPM) we stand ready to facilitate the entry into the Chinese economy for secure card based transactions.

Ukraine One of the Biggest Money Transfer Countries

Ukrainian workers in Europe transfer many Euros back home to their relatives and the amount is increasing. News out of Ukraine is that the tendency of Ukrainian workers in Europe to use electronic money transfers will increase during 2007.

The entry of large money transfer companies will increase competition in the money transfer business and will increase awareness of new money transfer solutions through abundant advertising.

As of now the primary means of money transfer is through existing banking methods which is the traditional wiring of money from one bank branch to another. So far there is not much use of stored value cards or card-to-card transfers. International Personnel Management, LLC (IPM) is positioned to change that.

Stored Value Remittance Card Systems

Reference the PR Newswire and the MiCash, Inc. website.

The MiCash Card is not by any means the only card system that performs stored value, purchase and remittance functions. The MiCash Card is an example of the types of capabilities that we at IPM are able to implement worldwide.

Through a partnership of existing providers and technologies a robust remittance, merchant and customer system can be beneficial to many populations in areas around the world. International Personnel Management LLC has the expertise to bring together the proper technologies with the decision makers and civil society to implement workable systems.

Recipients' Interest in Joining the Banking System

From the study conducted by Visa International found on the Payments News website there are listed benefits for remittance recipients to join the banking system. From the article (Thanks to Bankwatch for the source):

"Key findings highlight the recipients' interest in joining the banking system.

• Approximately 50 percent of the remittance volume to the region is distributed through financial institutions, but only 11 percent is received in bank accounts; the remainder is distributed in cash. This shows that despite the participation of financial institutions in the process, recipients are not yet receiving the benefits provided by banking.
• 56 percent of interviewees expressed an interest in establishing some type of formal relationship within the financial system. Similarly, 70 percent showed a favorable attitude toward banks.
• Remittances are not the only source of family income. Nearly half of the beneficiaries are employed part-time or full-time, and for 52 percent of them remittances represent supplemental income. Only one of eight beneficiaries considers remittances the only source of income.
• 15 percent of beneficiaries save or invest the money they receive because remittances increase their income by 50 percent.
• Most frequent uses include purchasing goods, developing a business, savings in foreign or local currency, paying debt, and certain luxuries such as traveling.
• The level of solvency, spending potential, savings and investment are higher among remittance recipients than among people of similar socioeconomic levels who do not receive remittances. Nearly half are economically active people.
• 24 percent of senders interviewed have been living abroad for 10 to 15 years and continue to send remittances periodically, showing the consistency of this business in the long term."

We at IPM are uniquely positioned to benefit provider companies, civil authorities and end users.

International Personnel Management and Remittance

International Personnel Management, LLC (IPM) is here to implement remittance transactions and stored value card transactions in Latin America, the Caribbean (LAC) and around the world.

Contact IPM for the expertise, contacts and solutions to take your concept to reality.