HOUSTON -
The deal comes as Financial Services Centers Cooperative is poised to connect almost 2,000 7-Eleven ATMs, all of them self-service Vcom machines, to its shared branching network.
Almost all of the 7-Eleven ATMs are already co-branded and play a vital role in the credit union-owned CO-OP Network. In addition, Cardtronics already has a major share of the credit union market by virtue of its connection to the credit union-owned Credit Union 24 EFT network and through its wholly owned subsidiary, Allpoint network, a surcharge-free ATM network that provides services to hundreds of credit unions. The $135 million 7-Eleven deal gives Cardtronics control over 30,000 cash machines in the United States, Mexico and the United Kingdom-28,500 of them in the U.S.
Keith Myers, executive vice president of Cardtronics, said last week the privately-held company sees the credit union market has a key part of its business plans.
"This is part of our strategy, part of our vision," he said. "And it puts us in a position to offer services to more credit union and more consumers throughout the United States."
The pending 7-Eleven deal, he insisted, will not affect plans for the FSCC roll-out. "We will honor all of the contracts that are in place," said Myers, of the FSCC plans, as well as the CO-OP Network's branding of 5,300 surcharge-free ATMs in 7-Eleven stores.
Sarah Canepa-Bang, president of FSCC, said she is excited about the Cardtronics deal. "This is actually good for us. The deal with 7-Eleven is still going forward. What this does is it gives us an introduction to the entire Cardtronics network," she said, adding that she hopes Cardtronics will add more Vcoms to its fleet, both in 7-Elevens and elsewhere, as it replaces existing ATMs or expands its fleet. The FSCC roll-out, originally pushed back to this month, has been delayed further until July, for technology reasons, said Canepa-Bang, stressing the difference between connecting ATMs and full-service kiosks-the equivalent of self-service branches.
"This is a whole different ball of wax. You have deposit-taking; withdrawals; there's a whole lot more data you have to deal with. We're letting people see up to 30 accounts," she said.
The deal gives Cardtronics the 10-year exclusive rights to operate all ATMs and advanced financial self-service kiosks in 7-Eleven's U.S. stores. Under the deal, Cardtronics will assume ownership or operation of all ATM and Vcom equipment currently owned or leased by 7-Eleven, as well as maintenance, cash replenishment, processing, customer service and operational functions for the machines.
Cardtronics is the world's largest operator or ATMs, operating in every major U. S. market. Cardtronics machines can be found in A&P supermarkets; Hess, BP, Amoco, Exxon/Mobil, Sunoco and Chevron gas stations; Costco; CVS, Rite Aid, Walgreen and Duane Reed pharmacies; and Target and Albertsons stores. The company has deals to co-brand those ATMs with some of the largest bank.
Over the last few years Cardtronics has expanded its operations internationally to include 1,500 ATMs in Britain and 500 in Mexico, with Allpoint connecting to the British machines.
Despite its nationwide expansion, Cardtronics has struggled with its finances, like other major independent ATM operators, but to a lesser extent. The company reported a first quarter loss of $3.4 million, up from a $3.1-million loss for the first quarter last year, even as revenues continued to grow. However, losses for its fiscal year declined to $327,000, from $2. 4 million for 2005, due mostly to settlement of a dispute with Winn-Dixie stores on discontinued machines.
The expansion of the Cardtronics network is also expected to renew plans for the company to go public, which it launched, then shelved, three years ago, said Myers. But those plans have not been made yet.
