Staking out its place in what may become a new competitive front in the ATM industry, NCR Corp. has inked a partnership with PayPal Inc. enabling person-to-person payments through ATMs, the company announced Oct. 12.
The Duluth, Ga.-based terminal manufacturer will initially offer the service in the United States, although customers may transfer funds to any PayPal account holder via an e-mail address or to a mobile phone in more than 60 countries, the company says.
While NCR cannot be certain what other ATM manufacturers may develop to compete in the person-to-person payment arena, the company believes its new service could challenge traditional money-transferring services similar to Western Union, Mark Critchett, NCR marketing director, tells PaymentsSource.
“We are enabling banks to provide this service, which includes a way to make a payment to someone internationally,” Critchett says.
After the consumer authenticates himself at the ATM, he will have an option to send money to an individual. To do so, the consumer will input the recipient’s email address or mobile number, choose an amount to transfer, and then funds will be immediately credited to the recipient’s PayPal account. If the receiver does not have a PayPal account, he will need to enroll in order to receive the funds, NCR said in the release.
The funds-transfer service will be equally accessible from drive-through ATMs, Critchett says.
When transferring a payment to a mobile phone, the numbers would be entered on the ATM keypad in the same manner as entering a PIN. If sending to an e-mail address, a touch-screen prompts a virtual keyboard for entering, Critchett adds.
The person-to-person payment service will be available to credit unions or banks operating on the S1 Corp. payment platform and using the NCR SelfServ ATM, the company says.
Critchett could not disclose the financial arrangement between NCR, PayPal and S1 Corp., but says individual banks will establish their own fees for the funds-transfers.
The bank licenses the person-to-person payment software from NCR, and the payment transfer service through S1, Critchett adds.
Sales of the ATMs offering the person-to-person payment will begin with the NCR sales force and possibly move to independent vendors and resellers of NCR equipment, though no official strategy has been set, Critchett says.
NCR has offered person-to-person payment schemes in the Middle East, and plans to extend the service into Europe in the future, he adds.
Industry analysts believe NCR may have an edge over competitors by being first to introduce the concept to ATMs.
“It’s very smart on NCR’s behalf to be the first one out there with this, as it is a good marketing tool,” Patricia A. Sahm, managing director at New York-based Auriemma Consulting Group, tells PaymentsSource. “They are a big behemoth in the terminal business, and it is hard to grow when you are the biggest.”
If consumers embrace the technology, more ATM manufacturers will probably attempt to provide similar services, Sahm predicts.
“But the first business shift will be from consumers sending money to family members in other countries; that all used to be Western Union, now I see some of that business going to banks offering this ATM service,” Sahm adds.
David Albertazzi, a senior analyst and expert with Boston-based Aite Group, believes NCR and PayPal will benefit greatly from the agreement, but he is not sure how consumers will react.
“As far as the consumer adopting this option at an ATM, I have my reservations there,” Albertazzi tells PaymentsSource. “It seems to me that mobile is the way to go on that [person-to-person payments], but we will see.”
PayPal could be the biggest winner in the end, because the agreement gives the online payments company a chance to gain enrollment because the recipient of the funds has to have a PayPal account, Albertazzi notes.
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