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HOUSTON -- After years of managing its ATM machines in-house, Timewise Food Stores, a division of Landmark Industries, decided to outsource the entire ATM management and maintenance process exclusively to Cardtronics Inc., a fellow Houston-based company.
Prior to the agreement, Timewise, which has 228 convenience stores in the areas of Houston and San Antonio, owned and operated all of its ATMs, and didn’t have any bank agreements or branding on its kiosks. Customers were charged a fee per use, and the company handled all of the maintenance for the machines in-house.
“We were very intrigued when Cardtronics floated the idea of becoming our exclusive provider of ATM services. While the decision to outsource our ATM program to them was multi-faceted, their ATM bank-branding program was a significant factor,” Robert Duff, partner at Timewise Food Stores, told CSNews Online.
Upon assuming management of Timewise’s ATM program, Cardtronics installed new ATMs at all of the chain’s stores and began fielding inquiries from prospective ATM branding partners, Duff explained. Cardtronics secures the branding partners, and the financial institution adds the ATM to its cash-access network, allowing its cardholders to get the convenience of fee-free ATM access at Timewise locations.
“Multiple financial institutions will want the ATM in our store to be part of their fee-free ATM network because Timewise Food Stores are so conveniently located for their cardholders,” Duff said. “Because the ATMs in our stores are now Cardtronics ATMs, as many as 10 financial institutions can place their brand on the ATM and make it fee-free for their cardholders. Of those 10 banks, one will be our premier ATM branding partner.”
It is up to the banks to notify their customers about the partnership with Timewise, so they are aware they can use the ATMs surcharge-free. The incentive to the banks is that the more customers who use the machines, the less money it will cost them as part of the contract.
“From an income perspective, the benefits to Timewise Food Stores include a mix of traditional surcharge fees, as well as revenue-sharing linked to the ATM branding program and the fee-free transactions it creates,” Duff said.
While the most obvious benefit of outsourcing its ATM network is time saved, another major incentive for Timewise was the cost dropping down to almost zero immediately, said Duff. When managing the process in-house, the required maintenance and use of an armored car amounted to large expenses.
“Our cost around offering ATM cash access in our stores has essentially gone to zero, with Timewise’s responsibilities now limited to providing floor space and power for the ATM,” Duff explained.
Also, with the marketing work done by the ATM-branding financial institutions, including adding Timewise locations to their ATM locators and mobile banking apps, Timewise has the potential to see much higher foot traffic at its stores. In the past, the revenue came solely from surcharge fees, but with ATM branding, there is the opportunity to draw from multiple revenue streams, bring more people through the door and increase spend at the point-of-sale, Duff said.
“Bringing on Cardtronics as our exclusive ATM services provider will be a very positive move both in terms of benefiting from the latest state-of-the-art equipment, as well as its very fine service,” he said. “Cardtronics’ proven ability to secure ATM branding partners makes perfect sense for us as we seek to best serve our customers.”