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ATM Manufacturer Wincor Nixdorf AG, which controls only a small percentage
of the ATMs sold to U.S. banks, has set a goal of capturing 20% of the U.S. market in 10
years, says Eckard Heidloff, the company's president and CEO.
Paderborn, Germany-based Wincor Nixdorf plans to accomplish its objective by taking market share from its two largest competitors, NCR Corp. and Diebold Inc., Heidloff tells ATM&Debit News.
Heidloff and two of his senior executives, Javier Lopez-Bartolome, president of Wincor
Nixdorf for the Americas and Iberia regions, and Patrick Wright, the new president and CEO of Wincor Nixdorf Inc., the Austin, Texas-based U.S. division, discussed the company's strategy during an hour-long interview last week at the Midtown Executive Club in Midtown Manhattan.
The company plans to build a strong U.S.- based organization, expand its service organization nationwide, market to community and regional banks, follow Heidloff's long-term vision of organic growth, and offer products that save banks money and make it easier for consumers to make deposits in ATMs.
By increasing its market share in the United States and the Asia Pacific region, Wincor Nixdorf wants to continue the successful growth it has achieved worldwide.
NCR and Diebold, however, are not standing still.
In April, NCR displayed its new SelfServ family of multifunction ATMs, which company officials and analysts consider
successful based on sales.
Still, Heidloff views the U.S. as the land of opportunity, calling it an important market for Wincor Nixdorf.
"The U.S. market is not growing very fast, but because we have such a
small market share we expect to grow at twice the rate," Heidloff says. "We have to
take share from NCR and Diebold."
So far, Wincor Nixdorf probably has not taken away market share from either NCR or Diebold, but the company has taken sales away from Tokyo-based Fujitsu Transaction Solutions Inc., says Gil Luria, an analyst with Los Angeles-based Wedbush
Morgan Securities Inc.
In 2003, Fujitsu Transaction Solutions stopped selling in the U.S. ATM market, but it must provide hardware and software support for machines it sold here for 10 years. Wincor Nixdorf accounts for less than 5% of ATMs sold to major U.S. banks,
Heidloff says. Its largest customers are San Francisco-based Wells Fargo Bank N.A. and New York-based JPMorgan Chase & Co. The U.S. market for
bank ATMs is expected to grow in the single digits this year after flat sales in 2006 and 2007, Luria says.
NCR and Diebold together account for at least 95% of the ATMs sold to U.S. banks,
Luria says. The U.S. bank ATM market is comprised of 150,000 to 175,000 machines,
says Bill Nuti, NCR chairman and CEO. In 2007, Wincor Nixdorf passed Diebold
to become the world's second-largest shipper of ATMs, according to Retail Banking
Research Ltd., a London-based strategic research and consulting firm (ADN, 6/5).
Heidloff takes pride in his company becoming the world's second-largest ATM manufacturer based on shipments. He notes that Wincor Nixdorf worked its
way up to second place from third without a strong presence in the United States.
Last year, Wincor Nixdorf controlled 21% of the worldwide ATM market. In 1994, the
company was the world's 12th largest ATM maker with a 3% market share, Heidloff says.
At the time, observers considered Wincor Nixdorf a regional supplier in its native
German market. "They should be proud," Luria says. "Their growth has been very impressive. They are the world's second-largest shipper and the world's
third largest in dollar volume.
"They are gaining a lot, but the question is –can they take it to the next level?" Luria says of Wincor Nixdorf.
The company has contracts or trials with nine of the 25 largest U.S. banks, but he says the company must win significant agreements with 18 additional banks to achieve its 10-year goal.
"If Wincor Nixdorf wants to capture 20% of annual sales in 10 years, that is achievable," says Leon Majors, president of Salisbury, Md.- based Phoenix ESP Payments Research Group. "If Wincor Nixdorf wants to capture 20% of the installed base of ATMs, that is a much tougher hurdle." Wincor Nixdorf's goal is to increase sales 20% per year counted in U.S. dollars, says Andreas Bruck, a company
spokesperson.
Fujitsu in 2004 controlled 4% of the installed base of ATMs, Majors says. That
year the company stopped manufacturing and selling ATMs in the United States,
Wesley Bates, a Fujitsu spokesperson, tells ATM&Debit News. Fujitsu sold its direct ATM service business to Diebold in 2004, Bates says.
"I still think there is opportunity out there for other competitors," Majors says.
Wincor Nixdorf's plan is to grow market share with innovative products, including an
envelope-free bulk-cash and bulk-check deposit ATM that accepts both checks and
bank notes in the same slot, making machines that accept checks and cash in separate deposit windows seem antiquated. Heidloff provided only sketchy details of
the new model.
Wincor Nixdorf remains the acknowledged industry leader in development of
envelope-free, bulk-check and bulk-cash deposit ATMs, but competitors have narrowed the gap, Luria says.
He draws an analogy between the oneslot ATM and the combination television
and DVD player of the 1980s. "If the ATM malfunctions, it won't accept
either check or cash deposits," Luria says. "It would require a lot of maintenance. When an ATM has two slots, it continues to accept either cash or check deposits when one malfunctions."
Wincor Nixdorf also has moved to firm up U.S. operations, recently hiring Patrick Wright as president and CEO of Wincor Nixdorf Inc., Wincor Nixdorf AG's U.S. division.
Wright, a 17-year veteran of JPMorgan Chase & Co., where he was senior vice president and head of retail operations, replaced Brad Waugh, who resigned in May but stayed on until the company hired his successor (ADN, 5/8).
Wincor Nixdorf also plans to develop the team that services the ATMs it sells.
The company employs technicians in 30 states but plans to expand to all 50,
Heidloff says.
However, Wincor Nixdorf's plan addresses only one part of providing service, Luria says. The number of technicians a company has carries more importance than the number of states where they are stationed, he says. NCR and Diebold each employ 4,000 technicians nationwide. Diebold employs 6,700 technicians in 44 countries.
Wincor Nixdorf employs 3,500 technicians worldwide, Heidloff says.
Despite obstacles, Heidloff remains constant in his vision of organic growth.
He points out that the company chose to build a U.S. service team from scratch,
employing Wincor Nixdorf's own standards instead of buying an established company
and wrestling with legacy systems.
