ATM&Debit News
Wincor Nixdorf International GmbH, the German automated teller machine company, has found it hard to gain market share in the United States, but two executives say a new business model has produced strong growth here.
"We're excited with our growth. This is our second year of double-digit growth," Brad Waugh, the president and chief executive of Wincor Nixdorf USA, said this month at the ATM, Debit & Prepaid Forum in Carlsbad, Calif.
The parent company closed the books on its most recent fiscal year Sept. 30 but will not release numbers until mid-December. It typically reports sales by regions, which can include several countries. Wincor Nixdorf USA is lumped together with operations in Canada, Mexico, and several countries in South America, including Brazil, to form the Americas region, which generated 7% of the company's $2.2 billion of net sales of in its first three fiscal quarters.
Wincor Nixdorf USA changed its business model last year, when Mr. Waugh became the president and CEO. Until then it had sold ATMs through a partner, International Business Machines Corp., but executives say the arrangement was not productive.
"Only one of the U.S.'s top 20 banks had piloted Wincor Nixdorf's ATMs or signed a contract to buy ATMs from the company," said Alan Walsh, Wincor Nixdorf USA's vice president of banking.
Wincor Nixdorf scrapped that business model, divided the U.S. bank market into three tiers, and seven sales territories.
The first tier includes the nation's 100 largest banks. Wincor Nixdorf began marketing to them directly by quintupling its sales staff, to 25, Mr. Walsh said. "We went from an indirect business model to a direct one."
As a result of the changes, Mr. Waugh said, nine of the 20 largest banks are testing Wincor Nixdorf ATMs or have signed contracts to buy them.
Its biggest customer is Wells Fargo & Co., which has deployed 400 Wincor Nixdorf ProCash envelope-free ATMs and is expected to deploy 825 more this year.
Last year Wincor Nixdorf shipped about 3,770 ATMs in the United States, according to the ATM&Debit News 2008 EFT Data Book.
But observers say the company remains a minor player here.
"There are 18,000 banks in the U.S., and Wincor Nixdorf only has a major presence with one of them," said Gil B. Luria, an analyst with Wedbush Morgan Securities.
Nor is he impressed that banks are testing Wincor Nixdorf's equipment. "Most banks will test equipment in their labs if you ask them," he said.
However, Wincor Nixdorf says it expects to make a major announcement during the BAI Retail Delivery Conference next month in Las Vegas.
An important part of the new business model has been building a team to service the ATMs the company sells, Mr. Walsh said. "We found that banks would not buy ATMs from us unless we could service them." Its service organization now operates in 22 states and is planning to expand.
Mr. Luria said that despite its low U.S. market share, Wincor Nixdorf may pass Diebold Inc. soon in worldwide sales, because of the fast-growing markets of Asia and Central and Eastern Europe. More than 60% of Diebold's sales are in the United States.
