Nautilus Hyosung Inc.'s pending purchase of Triton Systems of Delaware Inc. (CardLine,7/30) would give the combined companies enough market share to dictate prices to ATM independent sales organizations, contends Bill Dunn, vice president of sales for rival ATM manufacturer Tranax Technologies Inc. "Nautilus Hyosung and Triton would control 85% of the off-premise ATM-manufacturing market," Dunn says. Nautilus Hyosung, parent of Nautilus Hyosung America Inc., is scheduled to purchase Long Beach, Miss.-based Triton in the third quarter. If the combined company raises prices, it would signal a major change for ISOs, which deploy ATMs in convenience stores, hotels and gas stations. For at least the past two years, ISOs dictated prices to ATM manufacturers, says Richard Stern, president and CEO of TRM Corp., the nation's second-largest ISO in terms of machines owned. Portland, Ore.-based TRM buys ATMs from Nautilus Hyosung and Triton. ISOs benefited from an ATM manufacturers' price war in which Coppell, Texas-based Nautilus Hyosung America dramatically cut ATM prices to gain U.S. market share. Competitors followed with their own price cuts out of necessity. ISOs easily could absorb a price increase of a couple hundred dollars, says Leon Majors, president of Salisbury, Md.-based Phoenix ESP Payments Research Group Inc. But Majors is taking a wait-and-see approach concerning whether Nautilus Hyosung/Triton will raise prices. Some observers believe Nautilus Hyosung may keep prices low to drive Newark, Calif.-based Tranax–once Nautilus Hyosung's only U.S.-based ISO–out of business. The two ended their partnership in January 2007, and observers describe the companies' acrimonious split as a "blood feud." Triton sued six former executives earlier this year. In the lawsuit, Triton said, "[Nautilus] Hyosung has been a particularly strong competitor because it has been offering ATMs at lower prices and driving prices down in an apparent attempt to force other ATM manufacturers, such as Triton and Tranax, out of business." Nautilus Hyosung, which is based in Seoul, South Korea, declined to comment.

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