Diebold Inc. and NCR Corp. had good news for investors when the companies recently delivered their first-quarter earnings. Executives of the two ATM manufacturers told analysts smaller financial institutions were starting to take an interest in machines that accept envelope-free deposits.
Two recent announcements involving Alliance Credit Union and Bellco Credit Union also suggest the market for intelligent-deposit ATMs may be growing beyond the very largest of banks.
Alliance, a bicoastal credit union with offices in San Jose, Calif. and Wilmington, N.C., signed a five-year integrated ATM-services contract with Diebold that includes deploying machines that support envelope-free deposits. The state-chartered credit union deployed five intelligent-deposit ATMs in California and four in Wilmington.
The credit union also owns three cash dispensers–two in California and one in North Carolina. It has 45,000 members and formerly was named General Electric Co. Credit Union.
The Opteva ATMs have two slots–one to accept cash and another to accept checks. North Canton, Ohio-based Diebold equipped the ATMs with an enhanced note acceptor, enabling the machines to accept up to 50 mixed-denomination banknotes or checks at one time. Diebold and Alliance disclosed their agreement May 5, but they signed the deal Dec. 31, Melina Schoonover, Alliance assistant vice president, tells PaymentsSource.
Alliance wanted envelope-free ATMs installed to move credit-union members away from the teller windows, Schoonover says. “In Wilmington, a lot of members congregate in our office’s lobby, waiting for the teller,” she says.
As part of the contract, Diebold, through U.S. Bancorp’s Elan Financial Services processing unit, will process transactions initiated by Alliance’s 22,000 debit MasterCard holders, replacing Co-op Financial Services, a Rancho Cucamonga, Calif.-based credit union-owned ATM network, Schoonover says. Diebold also will provide ATM fraud protection and prevention, software-patch deployment and currency management.
The deal also reduces the number of vendors managing the credit union’s ATMs to one from nine previously, Schoonover says.
“The comprehensive integrated services engagement enables Diebold to optimize the performance of Alliance Credit Union’s self-service network and operations,” Charles E. Ducey Jr., Diebold executive vice president of North American operations, said in a statement.
It is too soon to say whether the envelope-free ATMs have led to an increase in deposits at Alliance because Diebold is still installing some of the machines, Schoonover says. Besides making deposits, credit-union members can use the machines to withdraw cash, view balances and transfer money between accounts.
Alliance’s agreement with Diebold ends a nearly two-decade relationship with Co-op, which declined to comment on Alliance’s decision. However, shortly after Alliance parted and ways with the network, Co-op disclosed a managed-services agreement with Bellco Credit Union, Colorado’s second-largest credit union based on assets.
Bellco upgraded the majority of its ATMs to envelope-free, image-deposit machines after signing a multiyear contract with Co-op. The agreement, announced March 25, ends an arrangement Bellco had with Minneapolis-based U.S. Bancorp that enabled Bellco members to deposit checks and banknotes in U.S. Bancorp and Fastbank ATMs. The bank’s Elan unit owns Fastbank. A U.S. Bancorp spokesperson declined to discuss Bellco’s contract.
Co-op either has replaced or upgraded 50 of Greenwood Village, Colo.-based Bellco’s 66 multifunction ATMs with Diebold machines that accept envelope-free deposits, says Eric Porter, Co-op executive vice president of business development and marketing. Bellco either purchased or leased new machines, he adds. The 16 other ATMs are cash dispensers.
Co-op, however, works with both Diebold and NCR. In December, Duluth, Ga.-based NCR signed a three-year outsourcing agreement with Co-op enabling its nearly 3,000 credit-union members to lease new ATMs. (see story).
Co-op Financial’s Co-op Payment Processing unit is providing ATM terminal driving and signature and ATM PIN processing. Bellco’s more than 190,000 members have more than 86,000 Visa-branded debit cards. Co-op’s platform provides ATM monitoring, and it enables Bellco to display marketing messages on the ATM screens, Porter says.
Bellco members appear to like the intelligent-deposit ATMs, Georgeen Goodell, Bellco’s director of systems operations, indicated in a statement. “We have rolled out check imaging on 50 ATMs, and the feedback from our members has been extremely positive,” she stated. “Our processing costs have been greatly reduced by eliminating the need for daily couriers and error checking since the computer confirms accuracy of the deposit before the transaction is complete.”
Porter declined to disclose how much envelope-free ATMs have increased Bellco deposits, but he says the machines are a proven technology.
Despite the Alliance and Bellco announcements, Porter says the credit-union industry is behind the banking industry in adopting envelope-free machines. Co-op is “trying to help credit unions learn the value of intelligent deposit” ATMs, he says.
Meanwhile, NCR says it is experiencing improved interest in the technology from regional and midsize banks (see story).
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