ATM Northeast Inc. (www.ATMetrade.com) was launched in January of 2004 by Kathleen Pacheco and Jack Kerney. Today the company is a successful ATM distributor having sold over 250 machines to various businesses. The company has a succinct mission to be an industry leader in providing new and reconditioned automated teller machines (ATMs) to the business community. A review of the literature suggests that the use of ATM's will continue to play a role in the American Banking System. With this understood, it is important that distributors know how to run a successful business and implement new tactics to ensure that they have the competitive advantage.
Automated teller machines have transformed the way that banking transactions are conducted. They provide consumers with quick and convenient access to their bank accounts and allows them to withdraw and deposit money. Across the globe there exists a group of business people known as ATM distributors. These individuals are responsible for the placement of ATM's in non-banking locations such as gas stations and restaurants. The purpose of this discussion is to share the story of one such individual who was able to become a successful distributor. The paper will discuss the history of her distribution company and provide a literature review on the subject of ATM's and successful distributors. Finally, the discussion will offer recommendations.
The primary research for this discussion was gathered from the experiences of Kathleen Pacheco who is one of the owners of the company. In her account, Pacheco describes the formation of the business and the issues involved in running the business. The secondary research was collected form a variety of scholarly journals and other periodicals. These sources provide insight into the world of the buying and purchasing of Automated Teller Machines (ATM)
Express ATM Northeast Inc. (www.ATMetrade.com) was launched in January of 2004 by Kathleen Pacheco and Jack Kerney (who also serves as a mentor). The company has sold more than 250 machines to a variety of customers including convenience stores, colleges, entertainment clubs, gas stations, restaurants, bars, postal services, car washes and nightclubs. The founders were presented with the idea to start this company by researching business opportunities on the internet. This business was created because the owners observed a need for the availability of ATM machines in non-banking locales. The founders also believed that there was a potential to make residual income from the sell of ATM machines. The company was able to start at not cost, which was also appealing. The master supplier for the business is Cardtronics (www.cardtronics.com)
The company currently has six employees. Jack Kerney serves and CEO while Kathleen Pacheco serves as that Vice President of Operations. The company also employs three sales people and one telemarketer. The responsibilities of Kathleen Pacheco include forecasting the budget, serving as a liaison for vendors and maintaining the website. In addition, Kathleen handles the human services needs of the company interviewing potential employees, training employees and holding weekly staff meetings.
The company has been successful in a relatively short period of time and has several competitors including CGI ATM, ATM USA, TRM ATM, Fidelity ATM, and E-funds. In addition, the company faces several barriers including state regulations, competitors luring customers away, retaining sales staff and the reluctance of business owners to purchase the machines for their establishment. Of these four barriers one of the more difficult to overcome is retaining a sales staff because they are paid on commission only.
Demand for ATM's in non-banking establishments
Greater access to customers through the internet
Proven ability to sell the machines to businesses
Difficulty retaining sales staff
Further expansion into more bricks and mortar stores
Contracts with restaurant or grocery store chains
Worries concerning the security of ATM's
Vision and Mission
Like any successful business, Express ATM Northeast Inc.has both a vision and a mission. The vision for the company is to launch a website. In addition the company desires to extend the business from its base in New England to a national enterprise via the internet.
The mission statement for the company is as follows; Express ATM Northeast Inc., is an industry leader in providing new and reconditioned automated teller machines (ATMs) to the business community. As authorized distributor for Cardtronics, we provide quality customer service and information throughout the decision making process.
Like cellular phones and the personal computer, automated teller machines have become a part of daily life for people around the world. Most people can scarcely remember the world without ATM's. According to Gup (2003) ATM's were first introduced in 1971 in Seattle, Washington. The author explains that ATMs first appeared because of the 'changing economic conditions in the early 1970s, when rising inflation and interest rates made it more difficult for consumers to borrow, reduced consumers' loyalty to their local banks (Moore, 1984). These changes in economic conditions and consumer attitudes stimulated competition among financial institutions. For banks that could afford the investment, "ATMs represented an attractive strategy through which to distinguish themselves and achieve a competitive market advantage (Gup 2003)"
Initially ATM's were not very popular and few consumers used them. However, the popularity of ATMs grew dramatically in the 1990's as consumers started to feel more comfortable using such technologies. Over the years, consumers have become even more reliant upon this technology because of the convenience it provides.
According to an article found in the journal, New England Economic Review, although most banks still have tellers, many consumers handle their banking through an ATM. The article explains that 'ATMs have been widely recognized as a convenient way to obtain cash. With the majority of ATMs connected to regional or national networks, cardholders can withdraw cash from most institutions in the country. At the same time, banks have regarded ATMs as a way to lower their costs, as customers substitute ATM transactions for costly live teller use. To induce customers to use ATMs instead of live tellers, some financial institutions impose fees for teller use or reduce monthly charges to depositors who use only ATMs (Stavins, 2000)."
ATM's can be found on a variety of places. Some of the most common locations for an ATM are places of business. Places of business seem to profit greatly from the presence of an ATM. An article found in Nation's Restaurant News explains the story of a restaurant owner and the increases in profits that he experienced as a result of placing and ATM in his restaurant, the article asserts
"I wish I'd had it eight years ago," he says. "Our business is up, and I'm convinced the ATM has contributed. Not only that, but we're counting up more cash than credit card receipts and checks these days ... Actually, it was the increasing number of check-cashing requests that motivated Bailey to begin investigating ATM programs two years before he made the final decision ... I wasn't interested in incremental profits, just providing that extra service for our guests. I wanted some equipment that would be a no-brainer-something that looked sophisticated, but was easy to use. We certainly got it. The service provided us by the ATM distributor is phenomenal. If there are any drawbacks, I haven't noticed them yet (ATM = automatic troublefree moneymaker, 1997)."
Indeed the use of ATM's has become one of the most practical parts of the American banking system and the business world. Like any good idea, entrepreneurs quickly found ways to profit from the use of ATM's. Most of the people who profit are known as distributors. In the aforementioned case, the business owner had a pleasant experience with the implementation and use of ATM's in his establishment. It seems that part of the reason for such an experience can be attributed to the ATM distributor; this particular distributor offered the restaurant owner excellent customer service (ATM = automatic troublefree moneymaker, 1997).
In recent years, much has been made of companies that are in the business of ATM distribution. According to an article entitled, "How to be a successful ATM Distributor" this type of business endeavor is not as lucrative as it once was but ATM distributors can still make a decent income. According to the article ATM distributors make less profit now because the margins are lower and the market is saturated.
The article explains that the number of ATM's in America has increased dramatically from 122,700 to 380,000 while ATM transactions have decreased ("How to be a successful ATM Distributor," 2005). This increase in the number of ATMs has caused the number of transactions per ATM to decrease ("How to be a successful ATM Distributor," 2005). The author asserts that there are also fewer viable locations in which to place an ATM.
So then, how are ATM distributors able to make money? The article suggests some tips to improve the odds of becoming a successful distributor. The author explains
"A common way for ATM Distributors to get started is to work under the…