How Many Financial Institutions Can Fit on an ATM? Cardtronics Says up to 10

Financial institutions wanting to expand the number of ATMs their customers can use in retail locations without those customers paying surcharges have a new option available under an approach announced late last week by Houston-based Cardtronics Inc.

While Cardtronics has for years offered financial institutions the ability to put their brand on Cardtronics-owned ATMs located in retail locations, those arrangements typically have been exclusive and involved one institution per terminal. Under the new “preferred partner” program, up to 10 institutions can put their brand on the same terminal and allow their customers to use that terminal without incurring a surcharge.

As part of the plan, however there will be one principal branding partner per terminal, which is allowed to put its name on the ATM topper and screen and on exterior signs. Then, multiple additional institutions will each put their name on a 2×2-inch logo decal located on the terminal.

Both principal and other preferred partners can list the terminal as a surcharge-free option available to their customers, but the principal partner will have expanded marketing opportunities.

Cardtronics is not revealing pricing, but a spokesperson says principal partners will pay more for the option. Cardtronics is also not revealing how many of the 19,000 ATMs that it owns and brands with financial institutions’ logos are involved in the program. The spokesperson tells Digital Transactions News the firm has piloted the option for several months and has only recently begun promoting the concept on a widespread basis.

The ATM network operator,which links machines deployed mostly in retail stores, came up with the concept after hearing from financial institutions that wanted to brand ATMs in locations that were already committed to another institution. The new program also allows institutions to participate in branding ATMs at a lower cost than an exclusive arrangement, the spokesperson says.

Cardtronics is also not saying how many financial institutions it has signed up for the program, other than to reveal the names of two participating institutions: Frost Bank and Texas Dow Employees Credit Union.

Ray Zapata, senior vice president and manager of ATMs and card services for Frost Bank, says his institution is working with Cardtronics as both a principal and preferred partner at about 600 ATMs in convenient stores. About 500 of the terminals are in principal arrangements. Separately, it has an exclusive branding deal with Cardtronics for five ATMs at Loves Field near Dallas.

While Zapata says the cost of participating as a principal partner is “significantly higher” than as a preferred partner, there are a number of marketing opportunities available with the first option. In addition to greater signage opportunities on the ATM and outside the store, for example, the software on the machines is cobranded between the bank and retailer to offer coupons and special offers that benefit customers of both the store and the bank.

Zapata says Frost Bank chose the principal arrangement for ATMs located in regions where Frost has a large market presence. The preferred locations are in regions where the bank does not have a large presence but where its customers often shop.

At least one observer sees some benefits to all participating parties. Sam Ditzion, chief executive of Boston-based Tremont Capital Group Inc., a consulting firm to the ATM industry, says the arrangement gives consumers more surcharge-free options to access their cash, and provides potential for more foot traffic for retailers, more transaction volume and potential revenue for Cardtronics, and more ATM availability for financial institutions.

While the principal partners get more marketing opportunities, preferred partners still have the ability to list the ATMs on their Web sites and ATM location maps, which appeals to potential customers.

Ditzion compares the difference between the two to consumers deciding whether to fly first class vs. coach on an airline. “Coach still gets you from Point A to Point B, but first class is clearly better service, albeit a higher-cost service,” he says.