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Trends in Off-Site ATMs Market
Trends in Off-Site ATMs Market
13,OCT, 200813,OCT, 2008
ContentsContents
• Trend in Off-Site ATMs
• IAD Market
• Off-Site Locations
• Off-Site Markets and Driving Factors
• Business Models
• Strategy for IADs and Banks
• Conclusion
• Trend in Off-Site ATMs
• IAD Market
• Off-Site Locations
• Off-Site Markets and Driving Factors
• Business Models
• Strategy for IADs and Banks
• Conclusion
Global ATM installations Global ATM installations
Since the emergence of ATMs in 1967, growth of ATMs have been rapidly growing in numbers worldwide especially from 1983. Now the number of ATMs reach up to 1.8 million and number is expected to hit 2.5 million mark in installations in 2013 according to RBR. We can imply from this trend that ATMs are still being needed around the globe.
Retail Banking Research, August 2008
19671968196919701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013
Compound Annual Growth Rate
• 2001 ~ 2007 : 7.5%
• 2007 ~ 2013 : 5.9%
• 2007 ~ 2008 : 7.5%
2.5
1.0 million
0.5
1.5
2.0
7.5%
5.9%
Global Off-Site ATM installations
Globally, offsite ATMs are growing in numbers as opposed to different locations. In 2007, the off-site ATMs take up about 47% of the entire ATM installations.
Between 03~07, the growth in off-site ATMs have been rising sharply.
7.2%100%1,779,965100%1,349,021Total
3.3%53%949,55262%834,210Onsite
12.5%19%330,74315%206,194TTW
0.8%3%51,5674%49,864Drive Up
-0.5%31%567,24243%578,152Lobby
12.7%47%830,41338%514,811Offsite
%ATMs%ATMsCAGR
20072003
2003 2007
Off-site : 12.7%
On-site : 3,3%
Retail Banking Research, August 2008
Latin America
North AmericaCentral & Eastern EuropeWestern Europe
Middle East & AfricaAsia-Pacific
2003' 2005' 2007' 2003' 2005' 2007' 2003' 2005' 2007'
2003' 2005' 2007'2003' 2005' 2007' 2003' 2005' 2007'
Global Off-Site ATM Trend Per Region
Overall
Off-Site
37.2%23,23462,45824.4%21.4%Middle East and Africa
41.8%237,485568,14614.8%8.7%Asia Pacific
32.2%64,282199,63524.0%8.3%Latin America
69.7%321,011460,53224.4%2.2%North America
30.0%108,143360,4792.3%4.9%Western Europe
57.3%72,717126,90738.9%29.3%Central & Eastern Europe
%OffsiteOverall OffsiteOverall
2007 InstallationsGrowth Rate 03~07
Retail Banking Research, August 2008
Off-Site ATMs in Europe
24%35%793 4,065 3,272Poland
9%44%332 4,174 3,842Netherlands
11%39%547 5,712 5,165Portugal
0%12%-6 6,232 6,238France
11%17%719 7,262 6,543Italy
10%41%702 7,776 7,074Turkey
5%14%413 8,364 7,951Spain
37%57%3,219 11,969 8,750Ukraine
4%21%406 11,812 11,406Germany
39%64%9,190 32,972 23,782Russia
9%71%3,852 45,392 41,540UK
Off-siteGrowth
(‘06~’07)
Off-siteShare(2007)
AbsoluteGrowth
2007 Off-Site ATMs
2006Off-site ATMs
Few of the European countries have experienced a growth in off-site ATM Installations especially in Russia, Ukraine and Poland.
Retail Banking Research, August 2008
1. Cardtronics (USA): 28,825 Installations
2. Innovus Inc.(USA) : 21,555 Installations
3. ATM Express (USA): 16,700 Installations
4. Hanco (UK): 8,641 Installations
5. Payment Alliance International (USA):
8,500 Installations
6. TRM (USA): 7,833 Installations
7. Euronet (Poland, Germany,
Czech Republic, Slovakia: 1301 installations
Off-Site ATMS by RBR 2007
1. Nautilus Hyosung (KOREA): 155K supply
(Retail : 108K supply)
2. Triton (USA): 118K supply
(Retail: 100K supply)
IAD (Independent ATM Deployers) Market
Emergence of IADs (Independent ATM Deployers) have played a key role
in boosting the number of installations worldwide especially in North America.
Due to this Trend, large IADs, and ATM Manufacturer specializing in low-cost ATMs have emerged.
However in Europe, IADs take up only 21% of the total off-site ATMs but there are increasing number of ATMs that are being deployed by IADs in UK, Germany, Czech Republic, Poland, Sweden, Slovakia, Norway among European Countries according to RBR offsite ATMs 2007
Leading IADs (2007)Leading IADs (2007) Manufacturer of Low Cost ATMsManufacturer of Low Cost ATMs
Popular Locations of Off-Site ATMs in Europe, 2007
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%
Supermarket
Factory/ Office
Other Retailer
Convenience Store
Shopping Centre
Bar/Pub/Nightclub
Petrol Station
Municipal Building
Street/Square
Hypermarket
Entertainment Centre
University
Rail/ Underground Station
Hospital
Department Store
10.1%Shopping Centre
10.7%Convenience Store
10.8%Other Retailer
11.2%Factory/ Office
12.1%Supermarket
Share(%)Location
Having an ATM at supermarkets and retail environment seems like the most
popular choice for off-site locations.
Retail Banking Research, August 2008
118933,089 2,405 Average
1211322,874 3,540 Turkey
1351152,900 3,699 Denmark
1801284,478 3,734 Norway
1031125,934 3,824 Netherlands
1341227,483 4,153 Ireland
78774,889 4,615 Poland
2431483,215 5,172 Switzerland
97859,845 8,029 Sweden
84849,314 10,105 Finland
Average Branch Value
Average Off-Site Value
Average Branch Volume
Average Off-Site Volume
Country
Monthly Transaction Volume and Value per ATM in Europe, 2007
European avg of monthly transaction volume at off-site is 2,405 transactions
and avg value at off-site is about 93 Euro per transaction.
Prominent Off-Site Markets
� Ireland73% off-site, highest in WE due to low cost ATMs by Banks (BOI, Ulster, AIB) Geographic population distributions: high pop in east low in West, low population in west could not justify the installation of the traditional off-site ATMs where Retail ATMs did. No Surcharge, Branding is popular
� UKIADs responsible for 69% of the off-site growth from 95~07 (42,500 installations) Low cost atms justifies an installations (merchant fill ATMS)
�USAAbout 70% of the installations are off-site. 25% of off-site is deployed by banks the the rest by the ISOs convenient store being the most popular off-site location.
What are the Driving Factors?
Prominent Off-Site Markets
�Australia Active IAD Market 12,500 (76.4%) out of 26,067 total installations.
�Canada 72% are off-site. 62% are ISOs. Major IADs,Lo Cost ATMs prevalent.
�Russia65% are off-site, Cash Driven
�JapanConvenient Store ATMs over 30,000 installations (17%) with diverse services with an average of 3,000 transactions per ATM per month.
Offsite account for 46% of the ATM installations.
What are the Driving Factors?
Geographies and Populations: More people = more ATMs
Geographies and Populations: More people = more ATMs
Cost of building Branches:
ATM cost < Branch cost
Cost of building Branches:
ATM cost < Branch cost
Low Cost ATMs By IADs:
Initial Investment is Low
Low Cost ATMs By IADs:
Initial Investment is Low
Surcharging Practice (Interchange): Surcharging as a Biz
Surcharging Practice (Interchange): Surcharging as a Biz
Cost of IP based communications:
Cost of communication is cheaper
Cost of IP based communications:
Cost of communication is cheaper
Traffic and Revenue Generator (Retail): Attract Customers
Traffic and Revenue Generator (Retail): Attract Customers
What is driving the growth of Off-Site Installations?
Proliferation of Deposit Automation
(More Off-Site Deposit ATMs)
Proliferation of Deposit Automation
(More Off-Site Deposit ATMs)
IAD Business Models – Seven Bank (Japan)
• 7 Bank Deploys 12,000 ATMs throughout Japan, an avg. of 2,950 transactions per ATM/Month
• 7 Bank ATMs has tie up contracts with 547 financial institutions across Japan and FI charges
their own amt to customers
• Offer Electronic Money, Prepaid Cards, Top-ups, Advertisements, Own-Bank Screens
• 7 Bank Deploys 12,000 ATMs throughout Japan, an avg. of 2,950 transactions per ATM/Month
• 7 Bank ATMs has tie up contracts with 547 financial institutions across Japan and FI charges
their own amt to customers
• Offer Electronic Money, Prepaid Cards, Top-ups, Advertisements, Own-Bank Screens
Seven Bank
CustomerSeven Bank ATMs
CashDepositsPaymentBalance InquiryTransfersAdvertisementsIC CardsOwn Bank ScreensE-Money (Cards)
BankWith
Tie-UpContracts
(547Banks)
Service charge for transactionPaid directly to banks with contracts
Seven Bank
ATM service Fee
Source: 7 Bank
• Store owners purchase ATMs and replenish
cash
• ATM users pay both surcharge and intercharge
• Store owners purchase ATMs and replenish
cash
• ATM users pay both surcharge and intercharge
Card Holder
Surcharge
Bank
NSP
Interchange
• Cirrus, Star, AMEX, Plus, etc
Switch
• Line Connection
• Low operation costs by using store’s cash
• Multiple players are involved
• Low operation costs by using store’s cash
• Multiple players are involved
• Service Co. provides total service from
installation, A/S and cash management
• Only surcharge for usage
• Service Co. provides total service from
installation, A/S and cash management
• Only surcharge for usage
Korea
Card Holder
Service Co.
Merchant
Surcharge
• Own machines
• Operation cost such as cash
delivery / Trouble Shooting and
Maintenance
• Provides installation
space
Bank
• Connect to financial
network
• Significant cost for cash management
• Store owners have minimum involvement
• Significant cost for cash management
• Store owners have minimum involvement
Vs.
USA / UK
ISO
• ATM Dealer, A/S
• Own machine and
provide installation
space
• Replenish cash
Merchant
IAD Business Models – Korea & USA
What should be the strategy for Banks and IADs?
Despite rapid growth of ATMs worldwide, Market Situation of ATMs has worsened for banks and IADs due to decreasing Number of transaction from each ATMs and rising costs from operating the ATM network.
There needed to be a way for Banks to reach out to the customers and be effective.
Growth of Non-bank ATMs
InstallationsTransactions per ATM
Declining transactions per ATM Growth Inhibitors (2003~2007)
1. High Operational and Maintenance Costs (CIT)
2. High Purchase Costs
3. Low Transaction Volume (Saturations)
4. High Site Rental
5. Security Concerns (PCI, EMV)
6. Optimization than Number (profitability)
7. Consolidation of Banks and IADs
1. High Operational and Maintenance Costs (CIT)
2. High Purchase Costs
3. Low Transaction Volume (Saturations)
4. High Site Rental
5. Security Concerns (PCI, EMV)
6. Optimization than Number (profitability)
7. Consolidation of Banks and IADs
Low endLow endcash onlycash only
ATMATM
Cash onlyCash onlyATMATM
Full functionFull functionATMATM
RecyclingRecyclingATMATM
MultiMulti--functionalfunctional
ATMATM
� ATM transformation
Cost Savings
Support transactions load
Create More Value Proposition
Generate More Business Opportunities
�
�
� Transformation of ATM role
Strategy for Banks and IADs?
Banks and IADs can look toward creating more value for the customers and
continuously generate business opportunities through the ATMs.
Monimax Series
NH-1500 NH-1800
NH-2100T
5000ce 5000xp 5300 5600
5200T5100T5000T 7600T 7600D
(Drive-up)
8000
8000T5300 withSidecar
5000 withSidecar
Full FunctionFull Function
ATMATMRecyclingRecycling
ATMATM
Mini-Bank Series
Nanocashseries
3000
2000
MultiMultifunctionfunction
ATMATM
3090 3090G
Cash DispenserCash Dispenser
Ubitus series
7600
The various ATM based on customer needs supporting customer’s specific ATM operating locations and their specific needs.
ATM Portfolio
Strong Interface with CustomerStrong Interface with Customer
Multimedia KioskMultimedia Kiosk
Flexible and innovative
approaches of service development
Flexible and innovative
approaches of service development
Generate various business
opportunities
Generate various business
opportunities
Off site ATMs is an ideal platform for various services for customers beyond
banking through strong network with other service providers.
Value Added Services and Biz Opportunity
Check CashingCheck Cashing
Automated DepositsAutomated Deposits
3rd Party Advertisements3rd Party Advertisements
Mobile Top-UpMobile Top-Up
Bill PaymentBill Payment
Camera
Check cashing
Authentication (Fingerprint)
Coin payment
Receipt printing
Withdrawal(Cash dispensing)
Coin dispensing
15.1” TFT LCD displaywith touch screen
Card reader
Bill acceptor
Barcode reader
Printed card dispensing
Encrypting PIN pad(PCI compliant)
Card printing and dispensing
Voice Guidance Wireless card contact
“ One stop service ”
Multi-Functional ATMs for off-site locations
BankBank
Credit CardCredit Card
InsuranceInsurance
AffiliationAffiliationAffiliation
Financial Service
Cash Withdrawal,
Wire transfer, Inquiry,
Cash Service (Credit Card),
Insurance,
Contract Inquiry etc.
Financial Service
Cash Withdrawal,
Wire transfer, Inquiry,
Cash Service (Credit Card),
Insurance,
Contract Inquiry etc.
Non-bank ATM Services
Payment Service
Utility, Rent, Tax, GIRO etc.
Payment Service
Utility, Rent, Tax, GIRO etc.
Other Value Added Services
Airline ticket,
Credit Rating Information,
Advertisements, Membership Support,
Cyber Money Transaction, etc.
Other Value Added Services
Airline ticket,
Credit Rating Information,
Advertisements, Membership Support,
Cyber Money Transaction, etc.
ServiceServiceService
Securities Company
Securities Company
Service Co.(Non-bank ATM)
Service Co.Service Co.(Non-bank ATM)
Other Service Providers
(Airline, Railway, Movie, etc.)
Other Service Providers
(Airline, Railway, Movie, etc.)
Non-bank ATMs meet customer’s diverse needs by establishing strong network with
banks, insurance companies, securities companies and other service providers.
IrFM (Korea) RF Card, RF Mobile phone (Korea) Mobile barcode (Korea)
Card payment(Thailand)
Card, bill& coin payment (Mexico) Advertisement & information(Korea,USA)
� Mobile Banking
� Various payment options � Dual display � Image processing
Business ProcessReengineering (Korea)
Offering more diverse ways for customers to engage with the ATMs
Various Ways for Engagement
In order for off-site ATMs to take off, all three aspect of ATM values (Basic Service, Value Added Services, Outsourcing) needs appeal to the deployers.
Synergy
Model
Value Value AddedAdded
ServicesServices
ATMATMOutsourcingOutsourcing
ServiceService
BasicBasicServiceServiceModelModel
More Transactions
More
Tra
nsactio
ns
More S
ervice
Revenues
<Future outlook for Off-Site ATMs>
Basic Service ModelBasic Service Model
Value Added ServicesValue Added Services
ATM Outsourcing ServiceATM Outsourcing Service
Proliferation of Off-Site ATMs
Thank youThank you
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