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NCR Corp. has signed a deal with PayPal Inc. that will allow consumers to make person-to-person payments through ATMs.
NCR, which makes automated teller machines, said Wednesday that it initially offer the service in the United States. But customers may transfer funds to any PayPal account holder via e-mail address or via mobile phone, in more than 60 countries, the company says.
The new service could help banks challenge traditional money-transfer companies, such as Western Union Corp., according to NCR spokesman Mark Critchett.
"We are enabling banks to provide this service, which includes a way to make a payment to someone internationally," Critchett says.
After consumers sign into an ATM, they will have an option to send money to an individual by typing in the recipient's email address or mobile number. The sender chooses an amount to transfer, and then funds will be immediately credited to the recipient's PayPal account. If the receiver does not have a PayPal account, he or she will need to enroll in order to receive the funds, NCR said in a press release.
The funds-transfer service will also be accessible from drive-through ATMs, Critchett says.
The person-to-person payment service will be available to credit unions or banks operating on the S1 Corp. payment platform and using the NCR SelfServ ATM.
Critchett would not discuss the financial arrangements between NCR, PayPal and S1 Corp., but says individual banks will establish their own fees for the funds-transfers.
Bank will license the person-to-person payment software from NCR and the payment transfer service through S1, he says.
Industry analysts say NCR may gain an edge over competitors by introducing person-to-person payments to its ATMs.
"It's very smart on NCR's behalf to be the first one out there with this, as it is a good marketing tool," says Patricia A. Sahm, managing director at New York-based Auriemma Consulting Group. "They are a big behemoth in the terminal business, and it is hard to grow when you are the biggest."
If consumers embrace the technology, more ATM manufacturers will probably attempt to provide similar services, Sahm predicts.
"But the first business shift will be from consumers sending money to family members in other countries. That all used to be Western Union, now I see some of that business going to banks offering this ATM service," Sahm adds.
