ATM Partnerships Prove Beneficial to CUs and Service Vendors

After reading a story about Nationwide Money Services, Inc., in CU Tech Talk, a credit union newsletter, Jeff Thompson, Web product marketing manager for Bronco FCU, Franklin, Va., called them about placing an ATM in the lobby of one of their select employee group hospitals. It was the beginning of a beautiful friendship.

 
 

After reading a story about Nationwide Money Services, Inc., in CU Tech Talk, a credit union newsletter, Jeff Thompson, Web product marketing manager for Bronco FCU, Franklin, Va., called them about placing an ATM in the lobby of one of their select employee group hospitals. It was the beginning of a beautiful friendship.

Bob Colabrese EVP of Nationwide Money Services (www.nationwidemoney.com) which is the exclusive provider for ATM and ATM related products in Food Lion supermarkets suggested that Bronco co-brand three of them as well, Nationwide has placed ATMs in 700 of the1,400 Food Lion stores and owns or operates 2500+ ATMs in 38 states. “It’s a proven marketing advantage for credit unions because all shoppers are exposed to their branding and it gives the look and feel of a much larger institution. Beyond that, customers have greater access to their money. Convenience is a huge draw, and we can deploy in under 30-days.”

Bronco now has 9 ATMs in Food Lions (soon 10) a chain big in the Southeast. But the number of Food Lion ATMs may rise conspicuously if the chain buys up any of the nearly 400 Winn Dixie supermarkets earmarked for sale owing to that company’s bankruptcy. Another large chain, Publix, will soon discontinue surcharge free transactions unless the financial institution is a member of Presto.

NMS will only work with a branded partner because “that’s the best model for everyone,” said Colabrese. Thompson likes that the ATMs give Bronco a greater presence in large member population areas and introduces the CU to new ones, particularly in low-income areas where it is expanding. The CU provides cash settlement (using Brinks at $150 per month) and first line maintenance, while NMS owns and drives the ATM and provides second-line maintenance. “We monitor each ATM over the Web in real time using software NMS provided,” said Thompson. The cost of deploying ATMs this way versus standard ownership and depreciation over 3-years was a clear advantage he added.

Other CUs have similar partnership arrangements that have proved to be beneficial, like the “no brainer” decision Tom Reimholtz described about Abbott Laboratories Employees Credit Union’s deal with Thillens Inc., (www.Thillens.com.)

“We don’t want to be in the deployment business,” said Reimholtz, citing Thillems nationwide deployment capability and price-fixe $700 fee per ATM. “We couldn’t do it for less than that so partnering was the sensible thing to do.” Seven of ALEC’s 20 ATMs are partnered and Reimholz wished he’d worked with Thillems sooner. For that flat fee, Thillems does it all: keeps it stocked, maintains it, insures it, surcharges non-members at a suggested CU rate and shares 66% of that revenue.

“The branding is also key,” stressed Reimholtz, who was pleased that only ALEC’s logo is on the machine. New security required by VISA and others, known as Triple-DES (software upgrades) also portends added costs that ALEC needn’t worry about.

The now ubiquitous ATM started as an adjunct to branches, but is now a required, 24/7 accessibility service and there seems no location unfit to install one. The most obvious site, especially for American Airlines FCU, is inside airport terminals. Fifty-eight of their 117 ATMs in 19 terminals have 24/7 access and now support the CU’s TIP/Air Transportation charter.

AAFCU’s Chief Operations Officer Carol Brown noted that hefty concession fees and increased security requirements at airports made partnerships, especially those with other CUs beneficial. The CU partners with Western FCU in Los Angeles; Delta Employees CU at Dallas/Fort Worth; Mountain America FCU in Salt Lake City and LaSalle Bank, Seaway National and Alliant (formerly United Airlines) CU in Chicago’s O’Hare.

“These partnerships help us get through the local political hurdles,” said Brown. AAFCU uses eFunds for processing, Diebold for maintenance and Loomis for cash replenishment, said Brown, adding that all location choices have to make financial sense. “We put them where we have a good membership population.”

 

 

 

May 10, 2004


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  • Great, you gave us vendor names and cost information!
    Anonymous