IMGCAP(1)]
Dexia SA, a Brussels, Belgium-based banking group with $8.3 billion in assets, has ordered 1,000 cash-recycling ATMs from Diebold Inc. in what a top Diebold executive in Europe says could represent the beginning of a purchasing trend by the Continent's banks to reduce the cost of cash handling.
Diebold is deploying the Opteva 328 EF/D model ATM at Dexia branches in Brussels as part of a two-year contract to transform the bank's branches, says Jerome Amara, Diebold spokesperson for the Europe, Middle East and Africa region.
"This is a huge branch transformation," Amara tells ATM&Debit News. Diebold's regional headquarters is in Geneva, Switzerland. "We have installed 250 ATMs so far, and we will install 250 more by yearend. The balance–500–ill be installed 2009."
The ATMs will move all cash transactions away from teller windows to the ATMs, which the bank will deploy in branch lobbies, he says.
Diebold and its competitors have deployed ATMs in Asia and Russia for decades because the countries' residents pay cash for the majority of their purchases, says Gil Luria, an analyst with Wedbush Morgan Securities Inc. in Los Angeles.
But the current economic downturn provides fertile ground for banks focusing on efficiency and profitability to consider cash-recycling ATMs.
Manufacturers of the machines first must offer persuasive arguments that the ATMs will save the banks enough money to justify their higher price, Luria says.
Manufacturers charge an extra $10,000 for a cash-recycling module, Luria says. A full-function bank ATM that does not recycle cash costs $25,000 to $30,000.
Cash-recycling ATMs also are drawing some attention in the United States, where some U.S. banks are participating in small pilots. Wincor Nixdorf USA, an Austin, Texas-based company owned by ATM manufacturer Wincor Nixdorf AG of Paderborn, Germany, is testing cash-recycling ATMs with a bank in the southern U.S. Wincor Nixdorf declines to name the bank.
"We are seeing the benefits of envelope-free ATMs, and we could see the benefits of cash-recycling ATMs if banks believe they can justify the cost," Luria says.
Cash-recycling ATMs can save a bank money by reducing the number of armored car pickups and deliveries, which are very expensive. "Depending on the branch location, the 328 EF/D can save one to two armored car pickups and deliveries a week," says Amara, explaining that the 328 EF/D will not eliminate armored car deliveries and pickups because customers do not deposit enough cash into the machines to cover all withdrawals.
Bank customers can deposit up to 200 bank notes at one time into the 328 EF/D. The machine counts the money and credits the depositor's account.
The ATM deposits the notes into the proper cassettes according to the bills' denominations for new withdrawals within 30 to 40 seconds, Amara says.
The ATM also separates out bank notes in poor condition for delivery to the bank supplying the cash so the financial institution can send the money to central bank for destruction. Dexia will deploy one 328 EF/D in each branch. In some larger branches, the bank will deploy a 328 EF/D next to an ATM that only dispenses cash, Amara says.
"Cash-recycling ATMs are not widely deployed, but the potential to optimize these machines is starting up," says Amara, explaining that despite proliferation of other payment means, including checks, and debit cards, the quantity of cash continues to grow.
In many countries, the cost of cash is an issue because banks must return cash to theircentral banks' offices where employees inspect the notes before bank branches reissue them through ATM networks.
"Cash-recycling ATMs reduce the cost of cash by enabling a decentralized and automatic recycling process," Amara says.
