Wincor Nixdorf AG is betting a branch ATM that can recycle bills will take off in the U.S. just as it has abroad.
The Germany-based ATM maker’s newest machine is different from those favored in the U.S. today that use two different elements to dispense and receive cash and require couriers to make frequent trips to replenish and empty the separate parts of the machines.
Wincor Nixdorf’s new cash-recycling ATM, announced last week, relies on merchants making large cash deposits at branches. The machine then dispenses the same cash in the same variety of note denominations to anyone making a withdrawal. The machine also has the ability to count how much cash it holds.
Though Wincor Nixdorf says its ATM can save banks money in maintenance costs, one reason banks might resist the technology is the machine’s reliance on merchant deposits to keep it well stocked for consumer withdrawals. Local retailers are hesitant to make big cash drops, analysts say.
To take full advantage of the technology, banks would have to deploy just the Wincor Nixdorf machine, whereas banks may prefer not to restrict themselves to a single manufacturer.
“They are all alone in this, and no one else has these proprietary cassettes. There needs to be significant adoption of Wincor machines in order to make this happen,” says Bob Meara, a senior banking analyst at Celent. “It is a new thing, and it’s pretty cool. But it’s obviously very, very limited.”
The new ATM also is expensive, costing between $30,000 and $40,000. A bare-bones cash dispenser costs less than $10,000, the manufacturer says.
Already, Wells Fargo & Co. is “taking a close look at the technology,” says a spokesperson. The retail-banking company is considering launching a pilot to test the machine.
Other “big banks” are following suit, says David Hadesty, Wincor Nixdorf vice president of strategic alliances and product management. Wincor Nixdorf is in talks with at least two national retail banking companies, he says.
Wincor Nixdorf contends banks could save money on maintenance by not relying on armored car services to replenish the ATMs. Instead, tellers swap out a cassette that is full to a machine that is empty.
Wincor Nixdorf is trying to make up for lost ground, Meara says. It has been trying to gain a foothold in the U.S. since 2006, and it was the first to introduce bulk-cash acceptance. Rival ATM makers Diebold Inc. and NCR Corp. were quick to follow.
Recently, NCR trumped Wincor Nixdorf with a device that could intermix cash and checks “upside down, backwards and still have it work,” Meara says. The cash-recycling machine is Wincor Nixdorf’s way of getting ahead, he says.
Even if banks embrace the new ATM, merchants may not, says Gwenn Bézard, a co-founder and research director at Aite Group in Boston. “If you are a restaurant owner, and you may have like $3,000 that you are feeding to the ATM, that just doesn’t sound practical,” he says.
The machines “will be inside the lobby, but as vestibules become more common, you will have keyed access,” Hadesty says. “So you don’t have to expose it to the weather. It’s not outside like a true island.”
Wincor Nixdorf eventually may decrease the cost of some of the technology the new machine offers to encourage adoption, Hadesty says.
As for the future of true recycling in the U.S., as banks and credit unions move to less-populated branches, the case for ATMs such as Wincor Nixdorf’s latest is clear, he says.
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