Applying Casino Lessons, Infonox Pushes Savvier ATMs for Banks

Convinced that banks are ready to upgrade ATM capability to sell more products and services, San Jose, Calif.-based Infonox Inc. says it is piloting marketing-savvy machines with unnamed clients and plans to have at least one commercial deployment in progress within six months. “There's a dramatic shift in the banking world as to how they want to interact with their customers,” says Safwan Shah, president and chief executive of the company, which provides transaction switching and software for ATMs and kiosks. “For the first time, we're getting enormous interest from banks.” In some measure, this interest stems from slumping per-machine transaction rates as well as a growing trend in banking to beef up profitability per customer, Shah says. Hoping to apply expertise it has developed switching transactions for casinos, 7-year-old Infonox is pushing Web-enabled, so-called service-aware ATMs that would prompt customers with data and enticements regarding products and services likely to interest them. Banks have tried?and largely struggled with?ATM-based advertising, but Shah says these new machines would go well beyond plain-vanilla marketing. “From the ATM portal, [the customer] should be able to navigate to other services,” he says. “It would not just push static ads.” Examples would include on-screen links to mortgage rates and other information, with the ability to print out applications, as well as prompts to enroll, again on-screen, in bill-payment programs. The idea, Shah says, is to exploit the fleeting moment when a customer is performing a transaction and is hence engaged with the bank. This concept requires a radical re-thinking of how ATMs should be networked. “It dramatically alters” the relationship banks have with local and national electronic funds transfer switches, which traditionally have routed ATM traffic between machines and banks, says Shah. But these data centers, some of which handle massive volumes of traffic, aren't suited to handle specialized transactions of the sort Infonox envisions, Shah says. To make the idea work, Infonox acts as a sort of intercept processor, disconnecting the machines from their current links, hooking them up to its own host, and then passing withdrawals and other conventional transactions on to Star, Pulse, and NYCE, or to local networks. Indeed, Shah argues, the day of the ATM as simple cash-dispensing appliance may be done. “There was a switch, which was a fast, dumb switch, and there was an ATM, which was a large, metal object?then the world changed,” he says. Infonox discovered this lesson when it entered the gaming industry shortly after its founding. This market, which still serves as its core business, presents a host of challenges for transaction processors. Unlike banks, casinos never close, which puts pressure on data centers to maintain uptime. And managers, loath to disappoint gamblers, demand that processors support a wide array of transaction types, including debit cards, check cashing, and withdrawals against credit lines. With Las Vegas, Nev.-based kiosk-deployer Global Cash Access Holdings Inc. as its client, Infonox switches transactions from about 7,000 transaction endpoints, including kiosks, ATMs, and cashier-manned machines, in casinos. It processes between 3.5 million and 4 million gaming transactions monthly, worth about $1 billion. “The lesson to be learned from casinos is, it's a much harder market [than banking],” says Shah. “When Infonox came into the casino industry, the [transaction] providers were banks. They had to give it up, because their legacy systems could not provide the services casinos and gambling patrons wanted. They've practically vacated the market.” Here, Infonox honed the infrastructure it now hopes to sell to banks, developing systems to prompt gamblers to get debit cards, obtain instant credit, cash checks, and the like. Now, with tests beginning with banks for the new ATM capabilities, Shah says that gaming experience is his biggest selling point. “Our first challenge is to prove that it actually works,” he says. “Our refrain is to [have banks] see what we've been able to do in the casino industry.”