Self-service checkout counters at supermarkets. Vending machines loaded with DVDs. If you ask William Nuti what these devices have to do with financial services technology, he'll tell you: Everything.
"Our [banking] clients are enormously benefited by the fact that we are doing business with their customers in other industries," said NCR Corp.'s chief executive. "We are learning about consumers in other industries, be it retail or hospitality or entertainment or travel, and incorporating that into our ATMs."
In the past, the Duluth, Ga., company just made simple ATM machines. Today the company's mantra is broadened, but still simple — self-service.
The concepts are similar. Essentially, NCR is attempting to pick up extra expertise by becoming a provider of ATM-like machines that perform different functions. Now, when you visit a company-operated machine you might be buying something at Wal-Mart, or checking into a doctor's office. "If you look at what we are doing, we are aggressively pursuing growth," Nuti said, noting that unlike consumer electronics manufacturers that also happen to make kiosks, NCR is focused solely on those products. "Large competitors, IBM and HP, and others have offerings but their core businesses are very different from ours."
So far, NCR has been aggressive. In December of last year, the company purchased the DVD rental kiosk operator DVDPlay Inc. The Campbell, Calif., company operated 1,300 DVD kiosks in North America. A week before that announcement, the company said it was planning to install more than 200 movie rental kiosks in New York. Now, there are Blockbuster Express-branded machines in drugstores operated by Duane Reade Inc., K-Marts and other convenience stores, nationwide.
And those check-in machines that sit in front of the baggage counters at airports? Those are NCR machines, too. Roughly nine out of 10 of those kiosks are made by the company, a spokesman said. In the future a mobile service will allow fliers to check-in from their phones, Nuti said. Eventually airplane passengers will see a barcode on their smartphone screens that can just be scanned.
All of this, however, does not mean a complete departure from NCR's original product lines. Banking will always be its bread and butter. In fact, NCR has been pushing envelope-free deposits and other advanced features. Late last year the vendor added two-sided printing capability to its SelfServ automated teller machines. Those printers can print transaction details and check images on both sides of a receipt.
"These other industries are critical to us. Will they grow, and grow quickly? Yes, they will. Do I hope that one day they can all be $3 billion businesses? I do, because that would make us an $18 billion company versus a $5 billion company," Nuti said. "But not ever at the risk of not being the No. 1 market share leader in financial services."
Still, the downturn in the economy has hit NCR, as well as its arch rival, Diebold Inc., hard over the past several years. Lower hardware sales to retail banks have hurt their bottom lines. "But I think you could pick these two names and lump them in with a lot of others and see revenue declines," said Michael Saloio, an analyst with Sidoti & Co. in New York. "I don't think it's surprising."
As for NCR, Saloio said, his outlook is bullish. He predicts that NCR will see revenue growth through 2011. Indeed, the company has already garnered some positive results; second quarter revenues increased 5% to $1.18 billion from the same period last year.