Wednesday, September 13, 2006

ATMs for buying services on the move

My trip back to the UK was a useful reminder of the different services offered by banks to their customers, compared to the US. Some banks seem to be playing with their vast network of ATMs as a channel for selling services alongside simple cash withdrawals. Given that many UK banks do not charge for withdrawals from ATMs within their broader partner networks, this may be considered an important way of improving the returns from cash machines.

The most common service I noticed was the ability to buy 'mobile phone top-ups' (Natwest provides a decent flash demo of how it works). Given the penetration of mobile phones in the UK (greater than one subscription per capita), offering services to cell phone users may make sense. Prepaid phones make up a significant percentage of the total, and buying top-up credit is something that users do regularly, so making top-ups easily available and fast to buy makes sense to the mobile networks.

From a bank point of view, ATMs do not need to be physically modified to dispense credits - a back end integration is purely required to talk to the common mobile networks. Compare this with Bank of America that insists on offering me the useful, but barely utilized service where you can by stamps. This type of service carries a cost in keeping the 'stamp dispenser' filled and presumably needed the ATM to be modified to operate this.

ATMs are suited to providing services to customers who are 'out and about', rather than performing transactions that they could perform in the comfort of the own home in front of the PC. What other services do (or could) banks provide through their pervasive ATM channel? The University of Pennsylvania has some thoughts that don't seem to extend much beyond the obvious mini-statement and check cashing. I expect that we will continue to see big differences between the offerings in the US and Europe, where electronic / online payments, direct debits and prepaid mobiles are common and paper checks/cheques are less so.

As payment mechanisms converge across online, mobile phone, debit cards and contactless payments (see Bankwatch for many examples), the ATM and mobile phone are likely to become a central point of contact for buying services on the move. As I focus more on mobile technologies, expect some new blogs on this soon.

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Phil Ayres said...


Good point. The personalization of ATMs so that they seem less clunky, as you suggest in your posts can be well supported by EDM, and can offer services that the customer otherwise wouldn't think of buying from an ATM.

Every new service will require a combination of supporting software, from EDM to BPM and integration, so the addition of services should be carefully considered. But given that ATMs are becoming just a specialized Windows kiosk, a well targeted online banking Web/Portal strategy could definitely be a starting point for understanding the problem.

ATMs offer a specific reach that mobile applications probably won't achieve for a while. Banks should look at the opportunities closely.

Anonymous said...

I'd agree it makes sense for ATM's to dispense things that can be managed " on the back end" and avoid having to maintain separate cassetes that need to be topped up. However, if phone top up can be done that way on at ATM, I'd note it can be done in Online Banking too.

How about top up of Chip Cards that contain a digital purse for small micropayments. Or... addition of new recently purchased applications, to the chip card. This is a marriage of ATM's with secure chip readers, and services that would otherwise have to be done in a branch.

Phil Ayres said...


I agree with you that any transactions or purchases that could be performed on an ATM could or maybe should also be available online. Having the same services offered through all channels is important.

As I look at it, ATMs are ideal channels for people to make purchases when they are on the move, and the ATM location is convenient. As an online user at my home PC, I would probably go to Virgin Mobile's website for phone top-ups rather than HSBC's.

So I would say that other services offered through ATM are best if they have this focus - a need for a service on the move that perhaps can't wait until later or can't be performed in the customer's home. That is why your Chip Cards idea is very appealing. I have been meaning to spend more time looking at the card and mobile micropayment space, so if you have posted any good items about this on your blog I'll try and pick through them soon.