NCR, Diebold Nixdorf build new foundation in the cloud

Nimble startups have used the simplicity of remote deployment to attract enterprise users and investors. Now, the incumbents believe they can also benefit from the concept, with Diebold Nixdorf and NCR both making moves in the realm of cloud hosting.

NCR, for example, has partnered with Google Cloud to expedite product development and deployment for payment processing, as well as expand its existing services and develop tools that reside in NCR's digital banking software portfolio. One of NCR's key rivals, Diebold Nixdorf, has also reported progress in its migration to the development of software delivered remotely through the cloud.

"We're looking for faster innovation and a way to enable mass scale for a larger number of banks and credit unions," said Doug Brown, president of digital banking at NCR.

NCR's Google integration covers retail banking and the NCR Authentic payment service. NCR hopes to expedite payment technology for e-commerce, including real-time processing or open banking connections to third parties. NCR is targeting smaller banks and credit unions that face challenges from fintechs, challenger banks or large banks that are diversifying services through embedded payments.

Embedded payments refer to the use of enrolled digital payment credentials to support e-commerce, traditional banking services and even services unrelated to finance such as streaming content, a trend highlighted by Apple Card as well as other initiatives such as Walmart's fintech venture.

Google has become a major enabler of embedded payments and fast onboarding, entering a deal with Stanford Federal Credit Union and Citigroup to offer bank accounts tied to Google Pay. Google Cloud's separate deal with NCR provides the longtime payment hardware company a way to collaborate with Google Cloud on future products as the need arises. NCR can also improve its ability to offer data storage, analytics and business insight.

"The community banks can compete with tier one banks and interact and partner with other tech firms," Brown said.

NCR, Diebold Nixdorf and similar companies with a long history of ATM and point-of-sale terminal manufacturing have been engaged in multi-year strategic overhauls. Their goal is to accommodate client bases that require connections to third-party mobile apps, digital payments and contactless self-service retail.

The pandemic accelerated that evolution and drew more attention to the necessity of bringing e-commerce-style user experiences to physical points of sale, and more payment and financial service functions to ATMs.

NCR added cloud capabilities to self-service technology, while Diebold Nixdorf developed an API that allows firms to decide what parts of its technology to deploy, along with enabling third parties.

"It's about the digital and the physical existing together," said Heather Gibbins, head of software sales at North America for Diebold Nixdorf. "You want a consistent experience regardless of channel."

Diebold Nixdorf's digital transformation ramped up about three years ago, fueled in part by a push to place more functions inside ATMs. Diebold Nixdorf, which did not provide client expansion numbers, says that strategy is making progress.

Community bank deployments include a recent upgrade at First Citizens National Bank in Dyersburg, Tennessee. By September, the $2 billion-asset bank plans to add bill pay at the ATM, faster credit and debit processing and real-time deposit access along with the ability to allocate funds and execute real-time transfers using cloud-hosted self-service capabilities. First Citizens did not provide comment for this article.

The bank also plans to install self-service tables in its branches to provide the same payment services at its remote ATMs.

Diebold Nixdorf is working to modernize its clients' methods of customer interaction.

"That's why we have APIs as a product strategy, we can work with the institutions and manage back end migrations with the firms they work with," Gibbins said.

As with NCR, the cloud enables Diebold Nixdorf to offer embedded payments to a larger range of financial institutions, which can then pair payment innovation with other banking products or allow community banks and credit unions to reach businesses with an digitized link to online payments similar to Stripe or Square, only with the head start of existing relationships.

"The most important element is that SaaS providers can provide state-of-the-art platforms to legacy banks and tech firms," said Ron van Wezel, a senior analyst for Aite Group. This can aid modernization projects at better pricing models, avoiding large investments, he said.