The National ATM Council Inc. estimates there are upwards of 425,000 ATMs throughout the U.S. The majority are independently owned or operated as opposed to those operated by financial institutions.
In fact, as banks have broadened online services, traffic to brick-and-mortar branches has softened, including visits to walk-up or drive-up ATMs. This situation has prompted account holders to retrieve cash from alternative locations like retailers, which is good news for convenience stores that provide financial services for their customers.
“In some of the smaller markets we’re in, small banks or credit unions have pulled out their ATMs and referred customers to us,” said Jeff Wrobel, chief financial officer for Kwik Trip Inc. “Customers [who use our ATMs] have a location that is available to them 24 hours a day, seven days a week as opposed to a bank that has to have a secured vestibule or an ATM out in the elements that’s not attended and subject to potential vandalism. It’s more efficient for them to allow customers to come to us.”
Analysts anticipate this migration away from bank or credit union-owned ATMs toward independently operated machines to continue throughout 2015.
“There will be strategic decisions by financial institutions to decrease the number of branches and size of branches, and part of those strategies is going to be outsourcing to independent ATMs,” said David Tente, executive director for USA and Latin America operations for the ATM Industry Association.
Indeed, Kwik Trip, based in La Crosse, Wis., in the last few years has added to its inventory of cash-dispensing machines at 400-plus Kwik Trip and Kwik Star locations in the Midwest. The family-owned chain also operates Hearty Platter and Tobacco Outlet Plus retail sites.
“Five years ago, a quarter of our stores had two machines. Now it’s probably more 80-90% of our locations have two ATMs. A handful of stores have three ATMs,” Wrobel said.
What could stymie ATM business in c-stores, however, is if various proposed state bills are signed into law. For example, New Jersey lawmakers want to restrict cash withdrawals of government benefits via electronic benefits transfer (EBT) cards exclusively to bank-owned ATMs.
“States also are looking at legislation that would forbid surcharging for these types of transactions,” Tente said.
Independent ATMs are being programmed to carry out more functions than just withdrawals, such as check cashing or distributing tax refunds, Wrobel said.
ATMs also work with smartphones for cardless withdrawals. “The user uses his mobile phone to take a picture of the bar code on the machine, and the mobile device serves to complete [the electronic transaction],” said Tente.