First Data Will Munch On ATM Growth In Turkey

First Data Corp. recently signed an agreement with Turk Ekonomi Bankasi–BNP Paribas to deploy off-premise ATMs throughout Turkey. The deal highlights First Data’s strategy to grow its role in ATM servicing outside the United States and a need for more ATMs in Turkey to reduce cardholders’ wait times at bank branches, where the majority of financial transactions occur.
Over the next three years, First Data and Turk Ekonomi Bankasi–BNP, which is based in Istanbul, plan to deploy 1,250 off-premise ATMs in retail locations and at other sites in major cities throughout Turkey, including Istanbul, the country’s largest city with 12.6 million residents.  First Data, bank and retail executives will select the ATM locations.
First Data’s involvement in the project shows the dual roles of the Atlanta-based company. Inside the United States, First Data primarily is known as a payments processor, but outside the U.S., it one of the world’s largest servicers of ATMs. First Data services more than 400,000 ATMs worldwide and those services include supplying cash, providing the machines with first and second-line maintenance, which includes front-end processing, hardware procurement, software implementation and fraud monitoring.
“First Data has deployed ATM programs with a number of European retail organizations, and the agreement reflects First Data’s growing emphasis on expanding  its ATM business globally,” company executives said in a statement.
Turkey is a great location for First Data to continue its expansion into the ATM business.
Turkey is one of the world’s hot markets for ATM deployment because there are so few ATMs in ratio to the nation’s population. Diebold Inc., the North Canton, Ohio, ATM manufacturer, recently opened a sales office in Istanbul to compete with NCR Corp. and Wincor Nixdorf AG (ADN, 10/22).
“The country has one of the highest numbers of payment cards in circulation in Europe and relatively few numbers of ATMs per million/population compared with other European markets,” Aysu Balik, a First Data spokesperson in Istanbul, writes in an e-mail message to ATM&Debit News. “There are 264 ATMs per million population, but the number of monthly transactions is higher than the European average. It is clear that there is scope to deploy a considerable number of new machines before the market is fully served.” Balik declined to say what company would manufacture the ATMs.
At the end of 2008, banks in Turkey had deployed 22,586 ATMs, a 20% increase from a year earlier, says Dominic Hirsch, managing director of Retail Banking Research, a London-based strategic-marketing firm. An influx of foreign capital into Turkey’s banking market has resulted in increased competition among the country’s leading banks to more bank-ATM deployments, Retail Banking Research reports (ADN, 10/22).
Turk Ekonomi Bankasi–BNP Paribas’s cardholders and customers of other banks will be able to withdraw cash and conduct other undisclosed services using the ATMs, Balik says. It is not clear whether bank customers will have surcharge-free access to the ATMs and if non customers will have to pay a surcharge fee.
 “This initiative is significant in terms of size and scale and will deliver value to our customers across the country,” Cemal Kismir, Turk Ekonomi Bankasi head of retail banking, said in a statement.
The ATMs will reduce wait times in teller lines at Turkey’s bank branches.
“Historically, [Turkey] has been a branch-based culture, where customers stood in line for a long time because everything was done at the branch–loan payments, utility payments, accounts, cash services, etc,” says Nicole Sturgill, research director for TowerGroup, a Needham, Mass.-based consultancy. “In the last few years, banks in Turkey have done a [180-degree turn] and have invested heavily in all channels. This has resulted in move of all of the typical branch transactions to ATMs and online banking.”
First Data and Turk Ekonomi Bankasi–BNP announced their agreement in November.