n ATM that sells tickets and coupons? That sounds vaguely familiar, doesn't it? Well, if it doesn't, it should. ATMs that did more than just dispense cash were at the top of the ATM industry's list 10 years ago. Financial institutions quickly embraced the notion that they could make a few extra coins selling movie or game tickets, so it didn't take much convincing on the part of manufacturers.

But those types of sales at the ATM didn't take off. And there were a variety of reasons why: long lines, malfunctioning ticket dispensers, low overall ticket sales, etc.

A Case in Point: Wells Fargo

San Francisco-based Wells Fargo & Co. has more than 6,200 ATMs in its network, a network that crosses 23, primarily western, states. In May 2000, the bank began its shift toward a Web-based ATM platform, and discussions of advanced ATM functions again came to the forefront.All of Wells' banking channels now speak the same language, which has made customer relationship management, for instance, a cinch.

"Our 'When? Where? How?' strategy is that we want to provide as many transaction conveniences as we can," Jonathan Velline, Wells' ATM Program Director, told ATMmarketplace earlier this year. "Our customers find the value in all of the things we offer: Internet banking, working with a teller and at the ATM."

And Wells is learning how to capitalize on that value, Velline added. But there are certain functions that the bank has already tried, and it doesn't plan to try them again. Two options that didn't work: ticket sales and bill-payment. "Ticket sales didn't make sense at the ATM," Velline said.

"[They] were great at the ATMs that were close to the venues [where ticketed events were being held]. But overall, ticket sales were not appropriate at the ATM. Bill-payment didn't work either," he added, "because most people are more comfortable paying their bills at home, where they can do it on the Internet or over the phone."

What's Different Now?

So why would manufacturers, 10 years later, want to sell ATMs that offer some of those same functions? That's what ATMmarketplace asked Fremont, Calif.-based Tranax Technologies Inc., which just last month introduced its new "Ticketing Self-Service Terminal." The Ticketing Self-Service Terminal, for all intents and purposes, is Tranax's Mini-Bank 2500, with the addition of hardware for ticketing, said Scott Holt, Product Manager of Self-Service Terminals for Tranax.

The Mini-Bank 2500, which runs on Microsoft Windows XP, is flexible, Holt said, which made it ideal for ticketing. That's because Tranax juiced up the Mini-Bank 2500, with the addition of a sidecar and Livewire International Inc.'s Destination Ticketing Solution software, which facilitates offsite and onsite ticket-sale transactions.

And Tranax isn't the only one jumping back on the ticketing and couponing wagon. Carrollton, Texas-based Tidel Engineering Inc. has recently been promoting its Tidel 3100 and 3400, both ATMs that have the flexibility to dispense coupons.

What's Changed?

"The market has learned a number of lessons," Holt said. "We want to make sure that the services we offer on the ATM are complementary. ... But I think the biggest shifts have come in user behavior."

"Users are very familiar with the ATM, maybe even more so than other self-service devices," he added, so offering different functions at ATMs could make sense from a user's perspective. "And some industries have forced consumers to get comfortable with self-service ... like the airlines and even the U.S. Postal Service."

One complementary offering: ticket sales. "There was a demand on two ends: from the end-user customers, like c-store locations and movie theaters that wanted one self-service unit that could offer multiple functions ... and from our distributors," Holt said.

Distributors want to differentiate themselves in the market, but they also want to build revenue, Holt explained. The solution: Ensure that ticket sales will build revenue for both the retailer and the distributor. Remember the 1990s? FIs quit selling tickets at the ATM because they couldn't make money. But for the ISO and retailer, ticketing could be a more viable option, said Jerry Silva, Senior Analyst of Delivery Channels for Needham, Mass.-based TowerGroup consultancy.

"In a retail setting, retailers are more likely to try new things," Silva said. "For one, they don't have the brand stigma that a bank does." And manufacturers like Triton, Tranax and Tidel, which typically work with retailers, are putting out machines that are reasonably priced and built to dispense coupons and tickets.

"It's a better fit at a retail location," Silva said. "You don't feel concerned about buying lottery tickets at a retail location, for instance, but you might at a bank."

He added that FIs don't typically like to get involved in side ventures, and "unless the coupon is good for Coke or Nike, banks try not to get involved with it." It also makes more sense, he continued, for a local merchant to dispense tickets or coupons for a Dunkin' Donuts, for instance, that's right next door.

Besides, Silva said, "bankers just don't speak the same language [as marketing, entrepreneurial types]. ... Even when one program has some marginal success, when you have an executive change at the higher levels [of the FI], the program goes away."

The Right Ingredients

After 1996, the year that Visa U.S.A. Inc. and MasterCard International allowed widespread surcharging, ATMs started popping up in the retail market. Run by more entrepreneurial types, the ground was being laid for ATMs with more options, Silva said.

De Lone Wilson, Vice President of Sales for Jackson, Miss.-based NetBank Payment Systems, agreed. "We were talking to movie theaters that wanted to dispense money and sell tickets at the same ATM seven or eight years ago," he said.

The problems: developing software that could integrate ticket-sale systems and then training retail personnel how to market those services. "Back then, we would go to Diebold and NCR, and they could sell us that equipment; but the way all of the systems tied into the ticket processor at the theater had to be developed. And nobody wanted to pay for that."

Beyond the software, ISOs and retailers need to: figure out what events they're going to sell tickets for; decide what kind of arrangement they can work out for the ticket sales with the team or venue; and determine how they're going to market the ticket offering.

"I think ticket sales are viable, but it's something that requires a lot to be in place," Wilson added. "You have to have the right opportunity and the right location and the right distributor, and all of them have to be on the same page. ... With all of that, I think it would be very beneficial," but that doesn't fall into place too often.

Tammie Kuhn, Director of Sales and Marketing for Ohio-based ATM manufacturer and processor WRG Services, said she doesn't see ticketing and couponing going over at the ATM anytime soon.

In fact, Kuhn says her expectations are reflected in WRG's sales numbers. The company sold 301 Genesis ATMs last month, its highest-ever monthly ATM unit sales. And in March and February, the company sold 250 and 150 Genesis ATMs, respectively.

Why is that important? Because the Genesis is an ATM with basic functions, Kuhn said, and it's WRG's best-selling model. The distributor price for the Genesis is about $2,100. "Our Genesis line has been out about two years," Kuhn said. "And 90% of what we're selling are Genesis. ... Some of our customers have expressed interest in couponing (or ticketing), but at the end of the day, we found that most people just want cash." And when distributors and ATM owners are told that it takes between five and six years to realize ROI on a ticket-dispensing ATM, they opt for something a little less complicated and expensive, Kuhn added.

In fact, an ATM with a ticketing option can easily cost about $4,500. And an ATM with two or three dispensers can cost between $6,000 and $7,000, prices most distributors don't want to pay for an ATM in a retail location that pulls 150 transactions a month.

The manufacturer's suggested retail price for the Tranax ticketing terminal is about $14,600, said Holt. But that's the total amount the end-user will pay, software and full ATM and ticketing functions included.

An ATM by Another Name Isn't the Same

Marketing of the ticketing ATMs also could impact their success. Holt said Tranax made a conscious effort to separate the ticketing terminal from its other machines, like ATMs.

"Tranax itself now has three business units, and one of them is focused on self-service terminals," he said. "We're not just ATMs. We want to differentiate our products to create new business, and we want to be sure that we use names that represent what we're selling. If it's an ATM with self-service functionality, then it's not really a kiosk or an ATM."

And the Ticketing Self-Service Terminal, with its software and customized transaction processing, is not really an ATM. That kind of "rebranding" is catching on in the ATM world. Illinois-based Pay-Ease Inc. has renamed its Pay-Ease V Series kiosk an ACM, which stands for automated commerce machine. The Pay-Ease V, which hit the market in July, is a bill-payment (another offering that didn't work for FIs) kiosk that has ATM functions. But "ATM" doesn't encompass everything it can do, said Wally Hanna, Vice President of Participant Services for Pay-Ease.

And, like Tranax, Pay-Ease is diversifying. It recently released its Pay-Ease F Series kiosk, a parking citation-management kiosk that it piloted in Milwaukee. The Pay-Ease F Series accepts payments for citations and dispenses permits.

The F Series is currently located in 18 police districts throughout Milwaukee. And the company is now deploying a similar ACM in Chicago, one that accepts water and citation payments. By January 2006, Hanna said, Pay-Ease expects to have 40 of its ACMs located throughout Chicago.

Original article: www.atmmarketplace.com/futurearticles.htm?article_id=23068&pavilion=112&step=story