Retail ATM operator Cardtronics Inc. is testing a system that takes location-based offers, which are typically linked to a card account or a mobile app, and makes them available to consumers who may prefer to pay with cash.
The technology, which Cardtronics calls its ALLTM Network, offers product discounts available at the store in which the ATM is based. This approach exploits both the growing sophistication of ATMs and the steady spread of location-based offers.
Cardtronics' ALLTM Network made its pilot debut last week at 17 Fresh & Easy neighborhood market stores in Phoenix, Ariz. Cardtronics plans a wider rollout of the technology in 2015.
Consumers use the ALLTM app on their smartphones to scan a QR code on their ATM receipt after withdrawing cash in order to receive the digital rewards or incentives being offered from a second digital screen display at the top of the ALLTM unit.
Javelin Strategy & Research has found that nearly 40% of consumers would be willing to scan QR codes as part of a payment or discounting process, according to Mary Monahan, head of mobile for Javelin.
"ATMs are going to get more sophisticated, and this [ALLTM] is an interesting step," Monahan added. "ATMs will become much more creative, because we are not even close to using them to their full potential now."
Banking technology providers have been encouraging customers to update ATM fleets. As part of those upgrades, banks have the chance to offer ATMs that provide more services and respond faster to customer feedback.
Over the next three to four years, banks in the U.S. will be offering customers many more services at the ATM, Monahan said.
The new ALLTM units are part of Cardtronics' Allpoint surcharge-free network, so customers of the 1,200 financial institutions in Allpoint would not pay fees to withdraw cash and redeem the product discounts, said Nick Pappathopoulos, director of public relations and corporate communications at Houston-based Cardtronics.
After scanning the QR code from the ALLTM receipt, consumers can check off the product deals they want to redeem prior to hitting a "check out" button on the phone. The app produces a new QR code for each discount. The merchant scans these codes at the point of sale.
"You can use the app at any time to view deals at the location, but scanning the receipt changes the offers from something you are looking at to something you can use," Pappathopoulos said.
Cardtronics will look to expand use of the ATMs through the Fresh & Easy franchise in California and Nevada, as well as through other stores in other parts of the country, Pappathopoulos said.
Even though the Phoenix units are part of the Allpoint network, not every ALLTM unit will automatically be part of Allpoint, which serves 43,000 locations in the U.S., Pappathopoulos added.
Earlier this month, Cardtronics completed its purchase of Welch ATM, a provider of retail ATM services. The acquisition added more than 26,000 ATMs to the Cardtronics portfolio.
The company's move into digital rewards and other modern technology comes at a time when ATM owners are also upgrading to accept EMV chip-based cards in the U.S.
ATMs are more frequently becoming targets of fraudsters using devices to skim magnetic-stripe transaction data or capture cardholder PINs.