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Rise of the machines

17 August, 2005
The ATM is necessary if you want to offer your customers true convenience
Page 45 
Plastic may be convenient but sometimes only cash will do. So if your site has an ATM you can bet that many consumers will choose it – to fill up their cars and their wallets at the same time. There are around 55,000 ATMs in the UK. Most are linked to banks and building societies but there are a growing number of options available for forecourt operators willing to invest in their own machine.
Cash Point Machines has just made that a lot easier with a new machine that sells for £1,999 plus VAT. Sales director Ed Ram says typically an ATM would sell for £2,500-£3,000 so it really is a good deal.“Forecourts with 450 cash withdrawals a month can get their capital back in six months, and 450 withdrawals a month is not excessive for a forecourt. One of our customers has 80-90 withdrawals per day.”Cash Point Machines has 650 ATMs in the UK – 20% of which are on forecourts. Any retailer who expresses an interest has to meet strict criteria – three million litres of fuel a year, £10,000 a week in shop turnover, and no free bank machine within 225 yards. They’ll then get a site visit. If everything is in order they’ll get their ATM within three weeks of their initial enquiry.Cash Point Machines charge what Ram likes to call a ‘convenience fee’ of £1.50. He says this allows his company to service the ATM and maintain it. He reckons the fee is not a problem and less than 2% of transactions at his company’s machines are reversed.Of course these fees have been under scrutiny by the Treasury Select Committee. However, the government found that the ATMs offered consumers convenience so they could stay. But transparency on customer charges or ‘convenience fees’ has been increased, so all surcharging ATMs must now carry a message on screens in their ‘idle’ sequence before a card is inserted stating how much the charge will be. Plus there must be external signage saying that the machine will charge for withdrawals.Georgina Wild, marketing manager of Moneybox, says most of her company’s customers understand that they have to pay a small fee for the convenience of withdrawing cash at a location where a bank would not place an ATM because of relatively low footfall. “We are providing a service where there would not be one otherwise. Typically our charges are between £1.50 and £1.75,” she says.Meanwhile, Bank Machine reports that it has an ATM situated 200 metres from a free ATM, but its machine still does over 3,000 transactions per month because it is convenient for regular visitors to go to this particular site.Howard Francioni, marketing manager of Hanco, reckons forecourts that don’t supply an ATM service risk losing out. “In comparison with a non-ATM customer, someone who uses a cash machine not only visits that particular outlet more often, but after withdrawing their cash they are also likely to spend more. By installing a cash machine the retailer can attract more customers, retain those customers for longer, sell more products and increase profits. It gives people an added reason to visit.” Harris International Marketing research has found that the average cash machine user visits a forecourt 2.7 times a week and spends £4.71 per trip, excluding fuel. This compares with the average non cash machine user who visits a forecourt 2.2 times a week and spends £4.23.Says Francioni: “It is not just the additional revenue generated by customers spending more with the retailer – there is also the income from transaction fees which the retailer receives each time money is withdrawn.”For forecourt shops, Hanco recommends retailers have free-standing self-fill machines inside the premises for maximum impact and ease of operation. Self-fill has security benefits over a fully-managed machine as cash already in the business is used to fill the machine and is then emptied to the safe outside trading hours. Transactions are also electronically banked directly to the retailer, which saves time by requiring fewer trips to the bank and saves on banking fees.Francioni continues: “We advise you to position your ATM so customers can see it when they walk in. If they need cash it may be more convenient to use the forecourt machine than find a parking space near their particular bank branch and customers with cash in their pockets may be more likely to impulse buy.”Some ATMs have been a target for criminals but Francioni is keen to allay retailers’ fears. He says a self-fill ATM is like a safe for money that is already within the business. It is left empty at night with the door open so would-be criminals can see it’s empty.Moneybox’s Georgina Wild adds: “Forecourt owners understand the benefits of having an ATM on site and this often out-weighs the risk of providing an ATM. Moneybox uses an ink dye system called Fluiditi in its external ATMs that stains all the cash if the ATM comes under attack. The ATM has multiple sensors to detect any unauthorised entry and posters are installed at the site to warn potential criminals about the Fluiditi system.”