ATM independent sales organizations are worried about declining interchange rates, rising costs and pending legislation, but the majority are still looking to expand their businesses within the next year, the results of a recent survey suggest.
New card-network policies and rising operations costs topped ATM ISOs’ list of concerns, with 28% citing “network changes and increased costs” as their chief worry, according to a survey Bloomington, Ill.-based ISO Kahuna ATM Solutions conducted online in November involving 69 ATM ISOs.
Changes Visa Inc. and MasterCard Worldwide have implemented within the past few years in the interchange rates ATM operators receive from card issuers have cut ATM ISOs’ revenue to alarmingly low levels, Bryan Bauer, Kahuna president, tells PaymentsSource.
“We have seen the card networks slash the net interchange rates for ATM acquirers to where, for some independent acquirers, it’s not economically feasible to provide ATM access for Visa and, particularly, MasterCard,” Bauer says (
Some 26% of respondents cited as a top concern pending legislation pertaining to card-network exclusivity rules, including the potential effects from the Durbin amendment within the Dodd-Frank Act.
The rules the Federal Reserve Board has proposed to comply with the legislation may “help or hurt” various ATM ISOs, Bauer says.
Executives of Cardtronics Inc. last month said the Houston-based ATM ISO possibly could benefit from the Fed’s proposed rules if the firm gains the ability to choose for routing purposes more payment networks, some of which might provide for higher interchange and charge lower fees (
The threat of declining overall ATM transactions ranked third among ATM ISOs’ concerns, at 15%, while ATM saturation and heightened competition ranked fourth, at 13%.
Seven percent of respondents said they were worried about “working harder to make less money,” while 3% said they felt “overwhelmed” by day-to-day business. Moreover, 2% said they were concerned about selling their businesses, and 1% said their top concern is “finding good salespeople.”
Survey respondents could select more than one topic that caused them concern, fear or worry.
Despite their various concerns, 73.5% of respondents said they were interested in growing their businesses within the next 12 months.
Some 20% of respondents said they were looking to learn more about remote deposit capture services, followed by 18.3% seeking more information about cash advances, 16.3% for prepaid gift or loyalty cards, 14.2% for bill-payment services and 8.1% for check-cashing services.
“It’s clear that U.S. independent (ATM) deployers are concerned about changing legislation and interchange erosion,” Mike Lee, chief executive officer of the nonprofit ATM Industry Association, which represents ATM ISOs, said in a Kahuna press release.
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