Small New Mexico Bank Beams Up

A community bank in New Mexico is looking to space to make its automated teller machines more profitable.

In what is believed to be the first agreement of its kind, Ruidoso State Bank, a $60 million-asset institution based in Ruidoso, N.M., has contracted with Affiliated Computer Systems, Dallas, to link its three teller machines to a regional ATM network by satellite.

By easing Ruidoso's conversion to a new ATM network, the satellite link enabled the bank to introduce hefty network transaction fees at its cash machines located at a local race track and a ski resort. Simultaneously, bank officials said, the agreement with ACS helps them to avoid the operational hazards associated with sending data over land-based lines.

Making ATMs Pay

The move represents one of the banking industry's most innovative attempts yet to make automated teller machines a revenue generator rather than just a customer service tool.

"With the transaction volume and pricing that we were doing before, our machines were net losers, and that just didn't make sense to us," said Dan Austin, vice president at Ruidoso State Bank.

Since the beginning of this month, Ruidoso National - located in the mountains of New Mexico - has been using a satellite dish leased from Affiliated Computer Systems to send ATM card transactions to the Pulse regional system, the nation's 10th-largest shared ATM network, based in Houston.

Up until several months ago, Ruidoso National had been sending transactions over land-based lines to the Cirrus ATM network. But the bank was unhappy about the limits Cirrus places on what fees a bank can charge its customers.

Pulse had no such limits, but a terrestrial link to the Texas network would require leasing three phone lines. To avoid the reliability problems associated with multiple remote phone lines and to reduce the operational hassles of dealing with three telecommunications companies, Ruidoso decided to try the satellite network.

Ruidoso National's ATMs, situated in gambling and resort areas in the New Mexico mountains, now charge fees for network transactions ranging from $1 at the bank's main branch to $5 at a machine at the local horse-racing track.

And for the first time ever, the bank will be making a consistent profit from the machines, according to bank officials.

|Technology Gave Us Freedom'

"I won't go so far as to say the satellite dish is solely responsible for making our machines profitable," said Ruidoso's Mr. Austin. "But the technology gave us the freedom to do what we needed to do."

When a transaction is initiated at one of Ruidoso's ATMs, a satellite dish at the bank's main office sends the information to ACS communications hub in Dallas. Through a Tandem computer there, ACS sends the transaction to the Pulse network. ACS provides gateways to 33 ATM networks in all.

"Ruidoso is the first bank processing its own transactions to use this system," said Matthew B. Atkinson, director of marketing for ACS' sales subsidiary, ACS Commercial Services Inc. "But the network links are there for just about any bank in the country that wants to follow."

In addition to using the satellite dish to improve ATM profitability, Ruidoso National is looking into joining the American Bankers Association's Bankers Education Network, which transmits by satellite.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.