To the Editor:
I rely heavily on American Banker, especially your cards section, for current trends and developments as well as prognostications in the ATM industry. Your Oct. 13 article "
I work in the refurbished hardware industry for banks and merchants, and a majority of our sales are ATMs. In response to your article, an additional salient point can be made: Strategic alliances between new manufacturers and independent third-party maintenance companies can present new business opportunities for both and drive down prices for financial institutions.
Diebold and NCR currently dominate the ATM market in the banking business. The newest machines from Diebold and NCR prohibit or restrict access to their diagnostic software by anyone outside of the company. Meaning, third-party service companies will be faced with added expenses in maintaining this new equipment. As a result, some ATM customers may only rely on the manufacturer for support, and third-party service companies will suffer.
The big manufacturers have found a way to increase their share of the maintenance business, and prices are increasing. Years ago, when third-party maintenance companies did not exist, maintenance prices were higher because there was no competition. Competition drives down cost, and the establishment of third-party maintenance companies has made this achievable. If third-party maintenance is squeezed, costs will go up for everyone.
Third-party service companies are challenged by the dominating manufacturers' restrictions on diagnostic software. However, the door may begin to open for these third-party maintenance companies, as well as new ATM manufacturers entering the financial industry. In turn, this will positively impact servicing fees for financial institutions.
The newest ATM manufacturers entering the financial market need third-party service organizations. These manufacturers do not have the servicing component integrated into their businesses models and will turn to third parties for maintenance offerings.
New manufacturers entering the market need the support of third parties and will make their diagnostic software available to these companies. Additionally, third-party companies can assist new manufacturers in the selling of their ATMs. The two work together to bring benefit to one another, as well as the industry as a whole. It is time for new manufacturers to enter the financial side of ATM deployment to keep competition alive and drive prices down.
