IMGCAP(1)]
Credit Union 24, the country's largest credit union-owned ATM and PIN-based point-of-sale debit network, Monday announced the signing of a marketing agreement with Cardtronics Inc. The deal allows Houston-based Cardtronics to promote its ATM branding services to Credit Union 24's more than 450 member credit unions to expand their ATM presence into new geographic areas.
Houston-based Cardtronics, the world's largest ATM ISO based on machines owned and managed, will brand the ATMs for CU 24 credit-union members that want to participate. Cardtronics will deploy the machines in the credit unions' current service areas or in geographic areas into which the want to expand, Jim Park, CU 24 president and CEO, tells ATM&Debit News.
"It's a way for credit unions to serve their existing customers and expand into areas where they can reach other potential customers," Park says.
State Employees Credit Union of Florida signed a branding agreement more than a year ago with Cardtronics that predates the CU 24 program.Cardtronics deployed 11 ATMs in Wal-Mart Inc. stores in Tallahassee, Fla.'s Leon County for the State Employees Credit Union of Florida, which is based in Jacksonville, Fla., Paul Callen, the credit union's president, tells ATM&Debit News.
"The largest part of our membership is in Tallahassee due to a merger. We wanted to have more of an ATM presence there, but we did not want to go through the expense of buying locations and ATMs when there was a cheaper alternative," Callen says. "We pay Cardtronics a flat fee, and we do nothing else. If the ATM breaks down, it's their problem. If the ATM runs out of paper, they supply it. If something goes wrong, they fix it."
The credit union benefits from the relationship because its name appears on the ATMs and on the ATM screens. "It looks like our own ATMs that we have in our offices," Callen says.
Credit-union members also can withdraw cash from the ATM surcharge-free. The credit union has the first right of refusal to install a new ATM if Wal-Mart elects to open another store in Leon County, Callen says.
Tallahassee, Fla.-based CU 24 signed a two-year marketing agreement with Cardtronics, Park says. If its members sign the ATM-branding agreement, it lasts for five years.
"Credit unions decide on a case-by-case basis and on a location-by-location basis," Park adds.
The branding agreement extends participating credit unions' brand names, which could help attract new members, Bob Colabrese, Cardtronics senior vice president of financial services said in a statement.
Callen says its branding agreement has attracted only a few new members, however. "You have to understand that Tallahassee is the state capital, and there are a lot of credit unions," he says. CU 24's agreement deepens its business ties with Cardtronics.
In July, the network and Allpoint, a Bethesda, Md.-based surcharge-free ATM network Cardtronics owns, signed a 30-month agreement, creating CU Here Premium Network, the nation's largest surcharge-free ATM network for credit unions. CU Here is part of the much larger CU Here Program, which is a suite of services CU 24 offers members, a spokesperson says.
CU Here Premium includes CU 24's 18,000 ATMs, Allpoint's 35,000 ATMs and Minneapolis-based MoneyPass' 13,000 surcharge free ATMs.
In early October, CU 24 signed an agreement with Allpoint, enabling credit unions that are members of the CU Here Program to use the 5,500 ATMs housed inside 7-Eleven Inc. convenience stores surcharge-free.
The program is scheduled to begin in January, Park says.
Cardtronics purchased 7-Eleven's ATM business in July 2007, and the ATMs are part of Allpoint's surcharge-free ATM network.
"If you look back through history, we have partnered with Cardtronics for a number of years. We have a number of business partners, and Cardtronics is one of our very good partners," Park explains.
Although Cardtronics' share price has dropped because investors worry about how the current economy will affect the company's performance, Cardtronics' branding contracts "have been unaffected," says Franco Turrinelli, an analyst with Chicago-based William Blair & Co.
In fact, Turrinelli writes in his analyst report that Cardtronics' "branding contracts and surcharge-free network will increase as a result of the recent events in the financial-services industry."
Cardtronics either owns or manages more than 33,000 ATMs in the United States, United Kingdom and Mexico.
Cardtronics' agreement with CU 24 only applies to the United States.
