My wife and I recently bought a camper we pull with our van. At first, we only considered the cost of the camper as being our high expense item. It turns out we had to add an entire towing system to our van, costing us an additional $1,000. We thought we could handle everything on our own and do it all for less money, but we were very wrong.
The same principle applies to ATM programs. Many credit unions feel they can do it all in-house and save a great deal of money. However, it rarely works out that way. Why?
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Costs: When you look at the overall costs of your ATM program, you may find it is inconsistent with what the original program promised. Many "out of scope" charges from vendors are actually fairly common, and ATMs demand much more labor and internal resources than many credit unions realize. Without the help of a dedicated professional, credit unions may end up spending quite a bit more than anticipated.
Credit unions are usually buying a small number of machines, parts or software licenses from their vendors…and paying a premium price as a direct result of these smaller quantities.
ATM service providers specialize in ATMs, often owning and operating a multitude of machines – usually purchasing in bulk quantities. This buying power allows them to negotiate better pricing with vendors, driving down costs across the board.
Labor: Running an ATM network involves quite a bit of hands-on work, negotiation and vigilance. First, there is the ATM hardware, which requires initial sourcing and purchase as well as oversight and scheduling of ongoing maintenance, repairs and upgrades. ATMs also require software on which to run the transaction functionality. This software must be monitored for security compliance and upgraded per regular software upgrade schedules, including Windows support updates and upgrades. ATMs must also have a link to a processor in order to complete transactions. Finding a reliable processor at a good price can take time as well as some trial and error. Finally, and possibly most difficult, is the handling of cash for the ATMs. Cash levels require insurance, consistent monitoring, delivery scheduling and security.
Despite the robust requirements for running a fleet, most credit union ATM teams do much more than handle ATM operations. In many cases, the ATM team also handles IT, marketing and/or regular administrative tasks. Since they do not specialize, they are likely spending more time on ATM-related tasks than a dedicated ATM operator does. Communication, processing and branding are just a few of the labor intensive services needed to run a successful ATM network.
Peace of Mind: Credit unions operating their own ATM fleets often don't have much recourse if the job was done incorrectly. When a machine is down, out of cash or, in the worst case scenario, breached, the credit union must absorb the full responsibility, time and costs to deal with the issue. This is not the case when dealing with ATM service companies, who typically offer service guarantees to their clients.
With ATM outsourcing, credit unions receive all of the required ATM services – including hardware, software, maintenance, processing and cash handling – managed by ATM professionals and experts. Most ATM outsourcing options provide quality brand products and service teams that are thorough, ready to help at a moment's notice and all for one monthly price. ATM outsourcing can save an institution hundreds, if not thousands of dollars by cutting the price of equipment and related services.
Credit unions should take the time to compare costs for existing ATMs, pending deployments and the cost to get sites prepared and/or upgraded. It is important not to forget the smaller items and details, as well. Then, they should ask an ATM outsourcing company to analyze the numbers and offer a quote. It may astonish them to see how much more they have been paying to do it themselves.
Mark Smith is an account executive at Sharenet ATMs. He can be reached at 770-670-9095 or [email protected].
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