Shaping the Future of ATMs

ATMAs new technology emerges, retailers are boosting profits in the changing era of financial services.

By Howard Riell, Associate Editor

Convenience stores that offer financial services are perhaps responding to societal changes. But as monetary tools become more modern—especially in the case of ATMs—operators will have to game plan even more to provide customers the best service options.

Claude Duvall, the owner of Local Yokel convenience stores in Milton, Fla., said that just like his deli and car wash offerings, financial and other ancillary services are important to drawing highway traffic and keeping local customers.

“Any reason you give a person to come in makes you better off,” said Duvall, who’s also the principal of Fast Cash ATM Services, which owns and operates 75 ATMs in Florida, Alabama and Mississippi.

Local Yokel’s flagship store sits on two-and-a-half acres alongside Highway 90. Approximately 35,000 cars pass by the store daily, as well as its freestanding, automatic drive-through car wash.  With all those potential customers, the company earns $9 million yearly.

The 3,400-square-foot store also offers patrons prepaid phone cards and money orders, as well as the services of a single ATM. Duvall said he made the decision not to offer bill paying services after observing a local competitor who does.

“The local lady who’s doing them does a very good job. You can’t walk in her store when it comes time for those bills to be paid. I just felt like it would overwhelm the store, and so it wouldn’t be worthwhile.”

Money orders are one of the most popular of his financial services, Duvall said.

“That’s because in the area I’m in we have a lot of people who don’t have bank accounts; they live in a cash world, so they prefer to do business with money orders,” he said.

ATMs As Kiosks
However, the single financial service that seems to keep customers coming back is the c-store’s ATMs, which continue to become more sophisticated, offering patrons more per stop. For example, Duvall last year spent about $15,000 making each of his machines ADA compliant. Now each machine has speech capability for his blind customers.

As ATMs evolve, the c-store will continue to invest in advancing technology.

“I envision the ATMs becoming more like kiosks,” Duvall said. “I think there is a very bright future for ATMs.”

Some models already permit users to buy lottery and event tickets. In the near future, ATM upgrades will allow consumers to do everything from apply for a loan and pay bills to plan their retirement, video-conference, forward money, increase withdrawal limits, and use apps to get cash quicker and offer touch screens that sync with smartphones.
Though increasingly flexible and potentially profitable, ATMs also come with costs. After spending $15,000 on ADA capabilities, Duvall is looking at even a larger outlay to accommodate EMV-enabled cards—named for developers Europay, MasterCard and Visa, which have an embedded microprocessor chip that encrypts transaction data differently for each purchase.

“All the new credit cards in the future are going to have computer chips on them, and none of the existing ATMs can read those cards,” Duvall said. “So you’re going to have to have a hardware and software change on every machine to make the cards work: a new card reader and a new software program.” The cost per machine, he estimated, is between $400-$900.

Duvall has long acknowledged the benefits of evolving technology. His was the first store in town to have an ATM, to scan products at registers, and to use a DVR so he could view operations via the Internet from a remote location.

When it comes to financial services and ATMs in particular, Duvall concludes, retailers must learn to get comfortable with technology’s cutting edge.



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