It's never a dull moment in the ATM industry. That much was evident from a panel discussion at the Amusement Expo International at the Las Vegas Convention Center Tuesday.
While the title of the session was "Maximizing an ATM route for better ROI," much of the time was spent talking about opportunities presented by cryptocurrency and cannabis.
The opportunities may not be immediately obvious to some, given the fact that U.S. banks in general do not want to deal with either cannabis or cryptocurrency.
The panelists nevertheless didn't hesitate to point to growth opportunities.
Cannabis rules and ATMs
On the cannabis front, cannabis dispensary owners cannot own or operate ATMs. Because the dispensaries don't take credit cards, cash is in great demand.
"It's been the gold rush the last three and a half to four years in the marijuana space," said panelist Michael Guthrie, vice president of Spokane, Washington-based Cypress Advantage, which operates ATMs in a few hundred cannabis dispensaries along the West Coast. Guthrie has a minimum of two pieces of equipment per location and as many as four based on the volume.
"The location owners do not want the machines going down," he said.
Which is not to say the dispensaries aren't posing some challenges.
The panelists noted some dispensaries are skirting Visa rules by having a credit card terminal that does not dispense cash, known as a "cashless ATM" or "point of banking." The customers swipe their cards, input their PIN numbers, then get the receipts which they use to purchase products.
"If you come across one of these things, this is a home run opportunity for you, you just hit a lottery ticket," said panelist Phil Webb, president, PDQ Merchant Enterprises, McHenry, Illinois. "When they get shut down, the cannabis dispensary, they need access to cash, you're that solution for them. Now you put your ATM in. Now you're rock and rolling."
Panelist Eric Hennings, senior vice president, Partner Advisory Services, based in Billings, Montana, said these "cashless ATMs" are not only operating in cannabis stores, but in liquor stores and other locations.
Fortunately, at least in Colorado, there are "cannabis friendly" banks, said Hennings. These banks are also helpful to ATM operators since they tend to have a lot of cash on hand that they are happy to unload.
"I've seen more than one happy marriage made with a cannabis-friendly bank," he said.
Given the reluctance of most banks to deal with cannabis and crypto, Hennings said it makes good sense for ATM operators to have separate bank accounts for crypto ATMs and ATMs placed in cannabis dispensaries.
Beyond cannabis and crypto
Cannabis and crypto aren't the only things piquing ATM operator interest these days.
Hennings said there are additional products for ATMs that are working today, including dynamic currency conversion, which is when an ATM identifies a foreign transaction. The ATM operator then prompts the card holder to convert it into their home currency, then collects a portion of the currency conversion fee.
Credit card segmentation is another promising product for ATMs, a credit card cash advance with a PIN. The credit card company charges 6% plus a $19.95 fee.
"You can upcharge the surcharge on that at the ATM," he said. "As soon as somebody tries to do a credit card cash advance, you can raise that surcharge by one, two, three, four or five dollars."
"You have to cast a wide net," Hennings said, referring to the new opportunities available. "You really need to penetrate this across your entire fleet because you never know where the bitcoin buyer's going to be. You never know when a family from another country's going to be on vacation, and you certainly never know when somebody needs an extra $400 on their credit cards."
'Nextgen ATM'
Looking still further ahead, Webb described the "nextgen ATM," an interoperable API App model for ATMs supported by a global consortium. One goal is to shorten the process of getting a new product into the ATM market from the current 18 to 36 months it usually takes.
"All we have to do is make an app, it goes on the ATM… and you guys could choose or not choose to implement this," Webb said. One current Nextgen ATM idea is to have an NFC QR code which a consumer could use to scan and receive money.
With regard to the future of ATMs, Guthrie said Brinks and NCR have acquired large ATM operators, which bodes well for the future.
"They bring money and they bring self-service," he said. "They believe cash is going to be around for a long, long time."
Joe Bundra, national sales manager, J&J Ventures Gaming LLC, in Effingham, Illinois, moderated the panel.
Source: kioskmarketplace.com
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