CLINTON, Md. -- The $182 million US Postal Service FederalCredit Union has taken the unusual step of outsourcing theprovision of ATM services in five branches to Select-A-Branch ATMNetwork.

Select-A-Branch uses a proprietary software system to presentcardholders from participating institutions with the same ATMinterface they would face if they were using one of theirinstitution's own ATMs. The move will effectively mean that USPSFCU will be able to both attract more use to their branch ATMs fromcardholders from other Select-A-Branch participating organizationswhile still presenting their members with the CU's own ATMinterface.

"Outsourcing our ATM offering was a big step for ourorganization," said Steve Cimino, an executive vice president forUSPS FCU. "But the S-A-B model presented such a unique shift in theATM business that it was a profitable step for us to take. Andsince USPS FCU screens remain branded in our look and feel, thereis no confusion to our existing card holders."

Aside from Select-A-Branch's standard customer service and brandextension benefits, outsourcing the ATMs eliminates maintenancecosts. And, since the network participant banks and credit unionsdrive traffic to Select-A-Branch locations, USPS FCU can expect toturn what has been traditionally known as a cost center into aprofit center, the network said.

No one from the CU was available to comment further about theATM decision, but executives from the ATM network celebrated theinnovation.

"Entering the out-sourcing market is a logical step for bothS-A-B and USPS FCU," commented Dan Gardner, CEO of the ATM network."The ATM member experience for USPS FCU cardholders remainsessentially the same, while cardholders of other institutions nowhave an added incentive to do their ATM banking at USPS FCUlocations."

"Banks and credit unions know that ATM services are key tocustomer retention," said Dan Stechow, the network's chiefoperating officer. "Yet, as average ATM transaction volumescontinue to slowly decline, those same organizations are findingthe channel more and more costly to maintain. S-A-B offers thoseorganizations a way to reduce costs, increase revenues andmaintains--or even improve--the branding and marketing messagestheir card holders experience. We're already entertaining multipleoutsourcing inquiries from other institutions. We see this as thetip of the iceberg."

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