Banner Federal Credit Union hopes the addition of  newcard technology will help draw more members and nonmembers to its11 ATMs.

The credit union has partnered with Better ATM Services to bethe initial financial institution issuing the myGIFT card, aclosed-loop gift card that carries the Discover brand. The new gift card is made of a new type of material that is thinenough and flexible enough to be dispensed through an ATM's cashdispensing mechanism but which is also firm enough to be used in apoint of sale terminal.

The nine national retail and restaurant chains that areparticipating include Macy's; men's clothing retailer Cabelos;women's clothing retailer Express; Lowe's; Outback Steakhouse;Bonefish Grill; Flemings Prime Steakhouse; Carrabbas Italian Grilland Roy's Hawaiian Fusion Grill.

“We viewed this opportunity as a win for us, a win for ourmembers and a win for our community,” said Roger Swanson, CEO atthe $59 million Banner FCU. The credit union benefits from theinterchange the cards will generate along with proceeds of a $2.50purchase fee per card, Swanson explained. Members benefit by havingeasier and more convenient access to a gift card that can be usedat popular national retailers and the community benefits fromhaving the Banner Health Foundation, a company-sponsored nonprofitthat seeks to expand health care services for the area's lowerincome residents.

The foundation receives a 50-cent donation every time a cards issold.

Banner FCU, based in Phoenix, is solely sponsored by BannerHealth, a health care and hospital network.

But will consumers, both members and nonmembers, purchase giftcards through an ATM?  After all, there have been numerousattempts to market all sorts of things through ATMs that have nevercaught fire with ATM users.

“Obviously, we have to get them to the ATM to buy a card thefirst time,” said Todd Nuttall, the CEO of Better ATM Services, thesmall Mesa, Ariz., firm that coordinated the details and technologyfor the new product.

“Once we can get them to buy a card through the ATM the firsttime, we find they are very willing to do it again. But if we justput the cards in the machines and didn't explain about them toanyone, no one would know to do it.”

Better ATM Services, which has quietly been working on asimilar, Visa-branded product with some credit unions on the EastCoast, believes ATMs provide a unique marketing niche for prepaidcards, a product line that Nuttall believes will be one of thedecade's hottest.

Nuttall explained that gift cards, particularly those tied toindividual retailers or retail chains, faced the first hurdle ofmaking their gift cards available someplace outside theirstores.  Many did that by getting their cards sold indifferent venues such as supermarkets or convenience stores,Nuttall explained, but then they faced a differentproblem. 

“You have your card on a supermarket rack,” he said, “but it'sthere having to fight for visibility and space and consumer'sattention with all these other retailers cards.  OurmyGIFT card enables retailers to move past that crowd.”

The firm knew it had a possibly winning idea early on itsdevelopment, Nuttall said, retailers that had gotten wind of whatthe firm was attempting, they asked to be included in the product'spilot testing.