Retail ATM Operator Cardtronics Expands Its Business With Walgreens and Citibank

Leading retail ATM network owner and operator Cardtronics plc announced expanded agreements Tuesday with the big drug-store chain Walgreens and banking giant Citigroup Inc. that will put Citi’s brand on more than 1,000 Cardtronics ATMs in Walgreens and Duane Reade stores in some key markets, including New York City and Chicago.

In addition, Citi’s brand will go on 900 other Cardtronics ATMs, and Citi customers will get access to 30,000 surcharge-free ATMs in Cardtronics’ Allpoint network.

Cardtronics currently owns and operates about 6,700 ATMs nationwide at Walgreens and Duane Reade, which is a Walgreens subsidiary in the New York City area, under a placement relationship going back to 2004 and covering fewer than 400 ATMs at the time. The 1,000 ATMs in the Walgreens/Duane Reade pharmacies that will soon sport the Citi brand were included in a portfolio of 2,596 off-premise ATMs owned by Citi rival JPMorgan Chase & Co. that Chase sold to Cardtronics in April 2016, according to a Cardtronics spokesperson. Chase had operated the Walgreens/Duane Reade machines under a direct relationship with the retailer.

In addition to the Walgreens/Duane Reade ATMs, the new deal calls for Citi’s brand to be placed on 900 more Cardtronics ATMs at Costco warehouse stores, CVS/pharmacy locations, and Target discount stores in various U.S. cities.

As is the case with Cardtronics’ many other branding deals with banks, Citibank customers will be able to use the Cardtronics cash dispensers at the new retailers without paying a surcharge. Cardtronics gets revenues from the banks to compensate for the lack of fee revenue from consumers.

Further, Citibank cardholders will not pay surcharges at 30,000 Allpoint ATMs located at many of the same retailers. “We are pleased to team up with Cardtronics to significantly expand fee-free ATM access for our customers at premier retailers nationwide,” Will Howle, had of U.S. Retail Banking at New York City-based Citi, said in a news release. “By nearly doubling our network of surcharge-free ATMs, we’re making it even easier for Citibank customers to meet their banking needs on the go.”

Moe Alkemade, group vice president and general merchandise manager for Deerfield, Ill.-based Walgreens, said in the same release that “ATM service is an important convenience for our customers. We are pleased these agreements mean that millions of payment card users will have surcharge-free access to ATMs in our stores.”

For Cardtronics, Tuesday’s announcements tighten its relationships with two long-time partners. “Cardtronics has served Walgreens and Citi independently for the past decade,” Jonathan Simpson-Dent, chief commercial officer at Cardtronics, said in the release. “Now we have the opportunity to bring these relationships together in a mutually beneficial way. Cardtronics has become the ATM infrastructure partner for both organizations and their customers, who demand free and easy cash access now more than ever.”

Strengthening existing relationships and forging new ones will be more important than ever this year as Cardtronics prepares to lose its biggest retail customer, 7-Eleven Inc., a leading U.S. convenience-store chain. This summer, 7-Eleven will begin transferring its ATM business to an affiliate of its Japanese corporate parent. Cardtronics had 7,850 ATMs deployed in U.S. 7-Eleven stores when 7-Eleven notified it in July 2015 that it would not renew its contract. Nearly all of the 7-Eleven ATMs bear the Citibank brand,

Wind-down plans remain on schedule, the Cardtronics spokesperson says. 7-Eleven accounted for 18% of Cardtronics’ pro-forma revenues in 2015, according to a company filing.

Cardtronics, which currently owns or services 225,000 ATMs worldwide, has spent the past two years making acquisitions in an effort to diversify its business. Founded in the U.S., Cardtronics moved its legal domicile to the United Kingdom last year, but its North American headquarters remain in Houston.