Better ATM: Amazon Gift Cards Now, Network-Branded Cards Later

A 3-year-old technology firm called Better ATM Services Inc. that configures ATMs to dispense prepaid cards is moving beyond its Phoenix-area proving grounds with local restaurants and into a test involving Amazon.com gift cards. If it works, distribution of network-branded prepaid cards could be next. During the upcoming holiday-season pilot with three independent sales organizations, about 24 ATMs will sell Amazon gift cards along with free Restaurant.com promotional certificates, according to Better ATM Services' chief executive Todd Nuttall. Restaurant.com sells gift certificates online on behalf of its 8,500 member restaurants and operates a Web site that drives viewer traffic to members' sites. The hope is that the combo will prove irresistible to consumers, who unless they've been to one of the six Phoenix-area restaurants where Better ATM Services has card-dispensing machines have probably never done anything else at an ATM except withdraw cash, check account balances, and make transfers, or perhaps make a deposit (Digital Transactions News, Oct. 15, 2007). That could spur more ATM usage at a time when per-machine transaction growth is slow, and it could help ATM ISOs tap into the fast-growing prepaid card market. “We bring the prepaid card world, which has been booming, and the ATM world, which is looking for new revenues and new services, together,” says Nuttall. Mesa, Ariz.-based Better ATM Services says it has become a reseller of Amazon.com gift cards, which will enable it to offer the cards to its partner ATM ISOs. The advantage of selling Amazon cards is that they give the holder choices for purchases among the millions of items on the Amazon.com Web site, Nuttall says. Seattle-based Amazon.com Inc. is the No. 1 e-commerce site, according to Internet Retailer magazine. A company spokesperson could not be reached for comment about the test. Better ATM Services' partners for the test are Automated Cash Management Systems, a Mira Loma, Calif.-based operator of about 400 ATMs; Portland, Ore.-based Aptus Financial; and a third, as yet unidentified ISO. “We are positioning our customers to offer consumers maximum value and differentiation at a time when the challenges couldn't be greater,” Jeremy Inman, Aptus's vice president of operations, said in a statement. “Technology-enabled ATMs dispensing gift cards will quickly become the industry standard.” Aptus manages about 2,500 ATMs nationwide. The typical configuration for the test will be a $25 Amazon card with a Restaurant.com certificate with a face value of $25, sold in combination for approximately $28. The restaurant discounts typically are linked to minimum orders or promotions. “By bundling those together, we can offer them at far below face value,” says Nuttall. “We are seeing, especially in the downturn economy, restaurants fighting to get people in the door.” Actual pricing will be set by the ISOs, with Better ATM Services getting a licensing fee and possibly other revenues, depending on the individual program. To get a good read on consumer preferences, the test will involve ATMs placed at a college campus, a convenience store, in a strip mall, and other high-traffic locations, according to Nuttall. Next up for Better ATM Services is the surging network-branded prepaid card market?cards with a Visa, MasterCard, American Express or Discover logo instead of just the logo of the retailer, restaurant, or other single merchant sponsoring a closed-loop card. Nuttall says he can't give details yet, but he is talking with financial institutions and card issuers about distributing network-branded cards through ATMs. “The ATM is one of the perfect solutions,” he says. “We are actively working towards that now.”