ATM Communications International, based in Wilmington, Del., has been granted a patent for a system that can enable standard automated teller machines to deliver bill payment services.
The system is anchored by electronic mailboxes that would reside on computers at regional electronic funds transfer networks. ATM cardholders could access their mailboxes, which would both receive billing information and allow cardholders to make payments, through any ATM in the network.
ATM Communications views the mailboxes as an alternative to home banking products for personal computers and screen-based phones.
"Home bill payment is coming down the line, but the terminals that will deliver this service are not really in place yet," said Hugo Vajk, president of ATM Communications.
Step Toward Home Banking
Mr. Vajk said he believes that delivering bill payment services through ATMs is, at the least, an interim step toward home banking that "make use of the investment banks have already made in ATMs."
There are currently about 94,000 automated teller machine terminals installed in the United States, most of which are usable by the roughly 65% of banking customers that have ATM cards.
In the ATM Communications system, the option to access an electronic mailbox would become part of the menu of transactions presented to a cardholder after the personal identification number is entered.
A cardholder who wants to access the mailbox would be prompted to key in an additional password. Once in the mailbox, the cardholder could read his bills, initiate electronic payment of those bills, and send messages to other mailboxes.
New Revenue Opportunities
Mr. Vajk said four major banks and three major regional electronic funds transfer networks have expressed interest in the mailbox system, which is known as ATM Cardpay. He declined to name the organizations, citing a confidentiality agreement.
From retail customers, the service would bring in new opportunities for transaction-based revenues. Access to a mailbox would likely carry the same charge as an ATM interchange transaction.
On the wholesale side, the service could be an attractive cash management service that would allow a bank's corporate customers to cut billing and collection costs by allowing portions of their accounts receivable activities to be done electronically.
Fear of Longer Lines
However, the payment service is not without potential drawbacks. Enabling an ATM to handle more complex transactions, such as bill paying, could result in longer lines at high-traffic terminals, as customers wishing to do a basic transaction are forced to wait behind a customer doing a more time-consuming bill payment.
The fear of such "queuing problems" has kept many bankers from extending the functionality of the ATM, and experts believe the fear will play a large role in how ATM-based bill paying is received.
