Strategic Placement Leads to High ATM Volume

Gateway Metro Credit Union, a $115 million credit union based in St. Louis, Missouri, has developed a successful ATM strategy based on their approach to site selection. According to Jerome Lewis, CFO, In one month, we had about $1.3 million in ATM withdrawals. That's pretty substantial for only 13 ATMs. Gateway's success illustrates how critical site selection is to ATM placement.

 
 

A case study of Gateway Metro Credit Union

Gateway Metro Credit Union, a $115 million credit union based in St. Louis, Missouri, has developed a successful ATM strategy based on their approach to site selection. According to Jerome Lewis, CFO, “In one month, we had about $1.3 million in ATM withdrawals. That’s pretty substantial for only 13 ATMs.”

Lewis believes the key to their successful ATM program is extensive research of potential sites. “We try to do as much homework as we can,” Lewis explains, “We’re trying to use our member assets to best serve our members. If we can offset member expense by placement where we’ll have foreign user income, we consider that to be a strong benefit.”

Gateway initially considers whether the site will be servicing their members. Lewis describes their approach: “We have three criteria for deciding whether a site is right for us in terms of transaction volume. We try to place in strategic locations where we will have sufficient usage by our members only, members and foreign users, or only foreign users.” In sites where Gateway expects only foreign users, they conduct surveys to determine if the fee income will support the placement.

In one recent example, Gateway Metro opened a new ATM at a site with primarily foreign users, the Federal Court Building in downtown St. Louis. “We knew the volume would support the placement,” says Lewis. He says it took about six months for this ATM to turn a profit. “Usage gradually increased as people became more familiar with it.” The ATM is located next to the court’s cafeteria for maximum awareness.

Two of their ATMs, located on the campus of their main SEG, Southwestern Bell, generate almost half of their total monthly ATM volume. They have one full service ATM and one cash dispensing ATM, both of which typically process more than 5,000 transactions per month.

Gateway Metro has further plans for expansion of their ATM network in 2002. Lewis says they are planning to place an ATM at another SEG site, where they expect to obtain high volumes in both member and foreign user volume. They expect that the fee income will fully cover the expenses of ATM placement at this site.

In addition to their ATM network, Gateway Metro is a member of the Information Technologies Credit Union’s Correspondent Credit Union Program (ITCUA), which allows member access to funds in 42 states. They can make deposits or withdraw cash at these ATMs, typically without surcharges.


This is an excerpt from another of Callahans' strategic research studies titled ATM & Branch Deployment Strategies. For more information on how this report can be valuable for your credit union, click here.

 

 

 

 

June 17, 2002


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