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This story appears in the Dec. 4, 2008, issue of ISO&Agent Weekly.
While Cardtronics Inc. has remained the nation's and world's largest ATM ISO based on number of ATM contracts, U.S.-based ISOs several rungs below Cardtronics have been consolidating, and familiar names are disappearing, according to the 2009 edition of the ATM&Debit News EFT Data Book.
The consolidation trend likely will continue in 2009 because of the saturated industry, says Gil B. Luria, vice president of research and transaction processors with Wedbush Morgan Securities, a Los Angeles-based financial-services firm.
"We've been at levels of saturation for a while now. It's made the industry more competitive," says Luria. "It's safe to assume it will continue to get more competitive. It will continue to consolidate."
In March, Payment Alliance International, the fifth-largest ATM ISO with 8,700 contracts under management, purchased Billings, Mont.-based ATM Express Inc., the third-largest ATM ISO with 16,686 ATMs under management. The purchase meant Louisville, Ky.-based Payment Alliance controlled more than 26,000 ATM-management contracts nationwide. Payment Alliance is the second-largest ATM ISO.
In April, Portland, Ore.-based TRM Corp., which owned or managed 10,473 ATMs at the end of 2007, purchased Whippany, N.J.-based Access To Money, the nation's seventh-largest ATM ISO with 5,000 ATM contracts, for $15 million. After announcing the deal, TRM said its ATM portfolio contains approximately 12,200 transacting ATMs. The acquisition places TRM as the fourth-largest ATM ISO.
The troubled economy, in part, will fuel more consolidation among ATM ISOs, says Luria. The ATM market already is saturated, and consumers have plenty of choice for obtaining cash, but "they don't need to do as many transaction in a slowing economy," he notes.
The saturated market, coupled with decreased ATM transactions, makes it "harder for these guys to compete," says Luria. For some, the "only chance is to consolidate," he says.
Payment Alliance and TRM did not return requests for comment by ISO&Agent Weekly's deadline.
Banks As Competitors
As the largest ATM ISO, Cardtronics does not compete with other ATM ISOs, contends CEO Jack Antonini. Instead, he views the nation's largest banks as his rivals.
"We rarely see them," Antonini said of other ATM ISOs during the fifth annual Emerging Growth Conference in Boston in September.
As he spoke, Cardtronics executives distributed materials showing the ISO owns more ATMs than any of the nation's other ISOs or largest banks. Its 32,475 ATMS surpass the ATM count of Charlotte, N.C.- based Bank of America Corp., which ranks first among bank-ATM fleets with 18,584 machines. Cardtronics bases its figures on the numbers in the EFT Data Book and other industry reports.
There is truth to Antonini's view of Cardtronics, says Luria. "By offering such a broad network to either consumers or other banks, they are competing with either the banks' networks or banks' internal management," he says. "Smaller businesses manage fewer bank ATMs."
Cardtronics lists itself as the nation's largest ATM owner, and the company also asserts it owns more ATMs than the largest banks abroad.
Tokyo-based Japan Post, which owned 26,103 ATMs at the end of June, was the closest competitor. Cardtronics says it owns roughly 33,000 ATMs. Cardtronics bases its totals on those provided by Retail Banking Research Ltd., the London-based strategic consulting firm.
With additional reporting by ISO&Agent Weekly.
