RETAILERS who wish to have an ATM in their stores can rent one from ATM Solutions instead of waiting for their banking institution to allocate them a unit.

Steven Kark, MD of ATM Solutions, says the company rents ATMs to retailers on a two-tier tariff scale.

Under the lowest rate the retailer rents the machine and replenishes it with cash.

As this money is usually taken from the cash coming into the store over the counter, this method can be an effective and low-cost solution.

By eliminating the need for ATM Solutions to service the ATM with cash, costs are reduced to the company, enabling it to offer a cut rate to stores.

"There are also savings for the store, over and above the rent of the ATM.
Stores save on cash-in-transit fees and cash deposit fees.

"This can be particularly beneficial in rural areas.

"It costs stores around 1% to handle their cash and by placing this cash into their ATMs instead they are increasing their turnover and lowering their costs," Kark says.

At the same time, having an ATM that the store needs to fill with cash is not for everyone.

Some stores prefer to have the whole ATM service maintained by ATM Solutions.

For example, some stores may have a cash-flow constraint that limits their ability to service their ATMs properly.

In addition, some store owners have security considerations and they do not want to handle the cash themselves nor do they wish to add this responsibility to their staff's existing work-load.

"For a slightly higher price we will ensure that the ATM is kept replenished with cash and handle all the security issues," Kark says.

Store owners gain by providing their customers with an additional service and by increasing the store's turnover. Stores also receive a small fee for every ATM transaction.

When people use ATMs they are charged a small fee for the service by their bank.

A share of this fee is paid to ATM Solutions, which, in turn, pays a slice of the fee to the retailer.

As a result, slower stores will have to pay in towards their ATM; stores with more customers will cover their ATM costs; and busy stores will find that their ATM makes a direct contribution to the bottom line.

"At the point where the store might have been able to obtain an ATM from a bank, the business is earning several thousand rands in additional revenue,"
Kark says.

ATM Solutions is in a volume business and the company makes its money from millions of people using its machines each month.

Therefore it pays the bulk of the transaction service fee back to retailers so as to give them an incentive to promote ATM usage on their sites.
Feb 19 2004 07:48:49:000AM  Business Day 1st Edition