Forget postage stamps and traveler's checks. Tomorrow's automated teller machines will let people download music from the Internet, buy toiletries and greeting cards, and consult customer service representatives by videoconference - and, by the way, take out cash.
Internet connectivity, high-definition video, and the growing ubiquity of ATMs have sparked the imaginations of the machines' manufacturers and deployers, who are busy devising ways that the trusty devices can be used to sell more things and provide more services. Most of the weirder proposals (like Diebold Inc.'s jukebox ATM) are still at the experimentation stage, but a lot of deployers have already presented the public with cash machines that dispense movie tickets, print maps of the surrounding neighborhood, or run full-motion advertisements while the money is being chugged up.
In New York, for example, Diebold machines owned by American Express Co. and stationed in Duane Reade drugstores promote ABC television's "Who Wants to Be a Millionaire" during transactions. Hotels around the country are looking into buying ATMs that sell, say, the can of shaving cream that a guest forgot to pack. And banks, forever determined to get customers to do transactions at self-service machines instead of the teller line, are discussing ways to make their automated tellers more attractive and useful.
People have been talking about Web-enabled ATMs and other enhancements for a long time, and now the first machines are being made available to consumers, and banks are telling suppliers and networks about ambitious plans. "The rubber is hitting the road," said Alvin Beiter, NYCE Corp.'s product manager for terminal driving.
Alanna Kellogg, an ATM expert who runs the Kellogg Group consulting firm in St. Louis, said the technology seems to be ahead of the deployers, which are struggling to make the most of the advanced functions. "The question is what and how to deliver what consumers, banks, and site owners all find valuable," she said. "Each one of those parties has different angles of value, and they are all too often mutually exclusive."
With more companies than ever determined to do more with their ATMs, two trends have emerged. On one hand, some companies - most of them nonbanks - are exploring ways to make ATMs more like vending machines, selling ancillary products at, no doubt, a significant markup. On the other hand, banks and some other types of deployers are looking to more sophisticated Internet technology to enable video face-to-face customer assistance and e-commerce.
Internet connectivity for ATMs has been available for a year or two, but most banks are not doing much with it, partly because they fear that waiting times at the machines will be lengthened. But many in the industry - particularly the ATM makers eager for banks to upgrade - continue to tout Web-enabled machines, which advocates say can coax customers to do more of their banking online.
Such ATMs can let customers go to a bank's Web site, where they can often avail themselves of their full relationship with the bank. More time-consuming tasks, like e-commerce transactions, might not be a good idea for bank lobby teller machines. "Don't look for people now spending 20 minutes looking at their e-mail," Ms. Kellogg said. "You've got to remember, the guy behind you wants his 50 bucks."
Few banks are offering Web-enabled ATMs, but many are making plans. The first deployer in North America, Canadian Imperial Bank of Commerce of Toronto, had seven "smart automated banking machines" in the Toronto area that let people check movie listings and buy tickets through a local theater chain. But CIBC discontinued the program, saying it would back off further deployment until it sees a clear sign from consumers that this is the way to go.
In the United States, First Union Corp. and Union Planters Corp. have pilot Web ATMs up and running, and other large banks, including Bank of America Corp. and Wells Fargo & Co., have pledged to move in soon.
On the marketing end, Hibernia National Bank of New Orleans has hired Diebold to install software in its ATMs that lets the bank deliver targeted product offers to customers.
One feature that is already becoming commonplace is full-motion advertising. Some banks are making deals with advertisers and using the video to bring in revenue, but most are treading lightly, for fear of bombarding customers with unwanted messages. Rob Evans, director of industry marketing at the ATM manufacturer NCR Corp., said people do not get annoyed as long as the ads run only when the ATM is idle or during the customary waiting time.
Ernest L. Burdette, president of Triton Systems Inc., a manufacturer of ATMs and cash dispensers, said the Long Beach, Miss., company is testing a model that has two screens: The top one plays commercials while the bottom one conducts transactions.
Some people in the ATM industry are advocating a shift in nomenclature to reflect the growing reality that ATMs are becoming "self-service kiosks" capable of performing multiple tasks.
James Accomando, president of Accomando Consulting Inc. in Fairfield Conn., said bankers should view the new breed as big vending machines - sort of like a Web-enabled soda dispenser "that backs into the cash-dispensing mechanism of an ATM." Depending on the location, such a contraption could sell assortments of sundries ranging from toiletries, books, and even, as some have suggested, boxes of worms for fishing.
At the Bank Administration Institute's Retail Delivery 2000 conference in New Orleans last week, Diebold, of North Canton, Ohio, was showing off its new jukebox-style ATM. Unlike the well-known jukebox/ATM at the Rock and Roll Hall of Fame in Cleveland, the Diebold model is Web-enabled and would let customers download music files at bars and restaurants. The ATM owner would get revenue from the standard surcharge and from a cut of the fee to play songs.
Some observers wonder how much demand there is for ATMs that do all these things, and whether banks - and consumers - will be willing to pay for the extra features. "I think it will start off slowly for sure," Mr. Accomando said. "But you will see them."
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