Daryl Cornell is President and CEO of Triton Systems. Prior to joining Triton in 2007, Daryl served as General Manager, Chief Operating Officer and Chief Financial Officer for a number of private equity portfolio companies. Before entering the private equity world, Daryl served for seven years in a variety of finance and operational roles at Ryder System, most recently as Area Director of Ryder’s Used Vehicle Sales Division. Daryl began his career as a Finance Officer in the United States Army.
PJ: From an ATM perspective, how different are the needs of financial institutions from independent deployers?
DC: Financial institutions generally view ATMs as a way to expand customer touch points, while automating branch banking by accepting cash and check deposits. As a result, ATMs have traditionally been seen by financial institutions as a cost center. However, the recent combination of shrinking branch footprints and increased ATM functionality is now challenging this cost center assumption. ATM functionality has moved beyond simply withdrawals and deposits, offering banks a means of brand differentiation and increased customer traffic and loyalty.
For IADs, the ATM business model has traditionally been all about maximizing surcharge and interchange by increasing ATM transactions. Depository functionality at retail ATMs is not typically a revenue generator for IADs. However, the volatile combination of market maturity, increased costs and reduced revenue has hammered IAD profitability, prompting the search for additional ATM functionality and revenue streams.
PJ: How interested are independent deployers and their customers in offering advanced ATMs, such as intelligent deposit/deposit automation machines?
DC: Many in the IAD industry believe that the need to physically make deposits at the ATM may be waning as remote deposit solutions are increasingly deployed. Rather than depository functions, Triton’s IAD customers are looking for ways to generate more revenue from their ATM fleets. These advanced technologies include variable load gift card dispense, quick pick lottery dispense, direct currency conversion and charitable contribution functionality to name but a few. In all cases, retail ATM transaction times must be kept to a minimum to maximize customer convenience and overall ATM transactions.
PJ: What features are most in demand for your customers today?
DC: Quality and increased functionality are what continue to drive retail ATM purchases. IADs want visionary products which will both attract and retain retail customers, increasing transactions and revenue. The new ARGO line is one example of Triton responding to customer needs.
In addition to maximizing ATM revenue, IADs continue to evaluate their total cost of ownership. A retail ATM in the U.S. often operates for a decade or more, making post-sale support the most critical part of the buying decision. IADs are increasingly demanding from the manufacturer technical support, parts availability, repair services, technician training, hardware and software upgrade support, ATM trade-in/ refurbishment and robust remote monitoring.
PJ: Do you think the tech generation will embrace the electronic wallet?
DC: We certainly think that this tech generation wants to embrace the electronic wallet. The real question is “when” it will come, and “what” will it be. There are so many players in the industry right now competing to be “the” solution for the e-wallet that it is hard to predict who the ultimate winners will be. Unfortunately, some of us are old enough to remember the Betamax/ VHS war and resulting consumer casualties. We also believe that e-wallet growth will be at the expense of debit and credit cards, as opposed to the use of cash. Triton is poised to support the winning e-wallet technologies, whatever their form.
PJ: What about NFC, will we see that on retail ATMs?
DC: Triton is already prepared to support NFC, with a flexible ATM hardware interface. However, until issuers and processors are ready for the implementation of NFC, widespread ATM deployment will have to wait.
PJ: What do you feel is the realistic time frame for EMV in the U.S.?
DC: Having been through EMV rollouts in South Africa, the UK, Canada and Mexico, Triton is already actively supporting the U.S. transition to EMV. Several of our customers have started ordering new units for their ATM portfolios, equipped with EMV card readers and software. These units can be remotely activated for EMV once the processors are ready. Our EMV experience has been that typically 45% of ATMs are upgraded via kits, 45% are replaced and 10% are retired. With an estimated 400,000 ATMs in the U.S. to be upgraded for EMV, approximately 180,000 new ATMs and an equivalent number of upgrade kits will be sold in the next 42 months, given current timelines. Those IADs who plan rollouts and start early should have no trouble acquiring gear and meeting the current timelines. However, with no regulatory mandate for upgrade, it may take a few highly publicized, six-figure liability shifts for U.S. IADs to start the EMV upgrade process.
PJ: EMV is migrating toward the United States, how will it affect retail ATMs?
DC: In every market, fraudulent transactions have decreased significantly once EMV implementation has been completed. We have already begun to see that the U.S. has increasingly become a target for fraud, as one of the few remaining non-EMV markets.
PJ: Are you seeing a demand for non-traditional ATM capabilities from your customers, such as the dispensing of prepaid cards, transit and entertainment tickets, and mobile phone top-offs?
DC: Yes, absolutely. Triton continues to develop new functionality which can be offered at the retail ATM. One example is our partnership with Better ATM Services, which offers IADs gift card and other prepaid media dispense from Triton ATMs. Another would be the e-Receipt functionality that we built into the ARGO line. The goal is to maximize the total number of ATM transactions, providing value to both the IAD and the end user.
PJ: Where do you see the market heading in the next 2-3 years? What capabilities are your customers lobbying for the most in the near-to-intermediate term?
DC: The U.S. IAD market will change drastically in the next 2-3 years and the status quo is no longer a viable option. OEM hardware and software support will be the most critical immediate needs for IADs as the U.S. implements EMV. However, post-EMV, IAD differentiation through custom software will likely separate the winners from the losers.
For more information about Triton, visit the Payments Journal Buyer’s Guide here.