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NCR Corp. says U.S. financial institutions have deployed 10,000 of its envelope-free ATMs since 1998. Based on the financial institutions' acceptance rate of the so-called intelligent-deposit machines, the Dayton, Ohio-based manufacturer boldly predicts the end is near for traditional envelope deposits.

"The days of licking envelopes at the ATM are soon over," Michael O'Laughlin, vice president and general manager of NCR Financial Services Solutions, said in a statement.

Retail Banking Research Ltd., a London-based strategic-marketing firm, predicts ATMs that accept envelopes are destined to become museum pieces by 2019.

The world's three largest ATM manufacturers–NCR, Wincor Nixdorf AG and Diebold Inc.–are leading shippers of envelope-free ATMs to U.S. financial institutions, says, Gil Luria, an analyst with Wedbush Morgan Securities in Los Angeles.

Neither Diebold nor Wincor Nixdorf has disclosed how many intelligent-deposit ATMs they have sold to U.S. banks. Some 150,000 to 175,000 bank-owned ATMs are targets for deposit automation, Bill Nuti, NCR chairman and CEO, said during a conference last year (ADN, 4/14).

Intelligent-deposit ATMs enable customers to deposit banknotes and checks directly into acceptance slots. The ATM counts the banknotes and displays the denominations of each on the monitor. Once the customer approves the transaction, the ATM deposits the cash. The ATM prints a receipt with an image of each banknote and check deposited.

The images of banknotes and checks on ATM monitors and receipts has helped convince consumers that envelope-free ATMs are safe, Brian Pilla, NCR director of financial marketing for North America, tells ATM&Debit News.

Depending on the envelope-free ATM and its location, deposits now account to 10% to 15% of overall transactions compared with 7% to 10% five years ago, Pilla says.
 JPMorgan Chase & Co. buys a large percentage of its ATMs from NCR and is converting entirely to envelope-free machines. While piloting NCR's intelligent-deposit ATMs, deposits increased by 50%, says Tom Kelly, a Chase spokesperson.
Banks want to increase ATM deposits because they free up bank tellers to handle more-complicated financial transactions, and they give banks access to deposits–inexpensive funds–they  can loan   overnight, say industry officials.

Envelope-free ATMs also eliminate the need for banks to stock branches with deposit envelopes. NCR could not say how much banks could save annually by not having to purchase deposit envelopes. Kelly, however, touts the environmental benefits. "We're much 'greener' now, and the area around the ATMs is much cleaner," he says.

With envelope-free ATMs, banks also no longer have to install counters that hold deposit envelopes and pens customers use to fill out their deposits. Often the pens run out of ink or are stolen.

NCR first deployed intelligent-deposit ATMs with its Personas line, but the company has gained traction with the SelfServ line it introduced in January 2008.
 Some banks are purchasing intelligent-deposit ATMs because of their improved capabilities and cost savings, Luria says.

When banks first rolled out envelope-free ATMs, the machines accepted either one banknote or one check at a time. Now they accept multiple checks and banknotes, he says.

The machines also provide a persuasive return on investment, Luria says. "Envelope-free ATMs save banks $1.50 to $2 per transaction because bank employees do not have open envelopes, they don't have to scan checks, and there are fewer armored-car pickups," he says.

Chase's Kelly agrees. "We don't have to service our intelligent-deposit ATMs as often," he says. "Instead of every day, we can service them two or three days each week."

Envelope-free ATMs also will enable financial institutions to deploy multifunctional machines instead of cash dispensers in remote locations, such as drugstores, Pilla says.

Kelly, however, does not believe deplo-ying the ATMs in remote locations will encourage customers to make more deposits. "When customers see one of our ATMs in a Walgreen's or a Duane Reade, they are looking to withdraw cash, not make a deposit," he says.

So far the market for intelligent-deposit ATMs has appealed primarily to the nation's three-largest banks–Bank of America Corp., Wells Fargo & Co. and Chase. Large credit unions, such Boeing Employees' Credit Union in Tukwila, Wash., also are deploying the machines.

Regional banks, however, are not showing much interest, Luria says. "By in large, they are dipping their toes in the water with a few pilots," he says. ShoreBank, a community bank based in Chicago,  is one of those banks.

 "It's not in our strategy right now. Perhaps it will change in the future," says Paul Navarette, business process reegineer in ShoreBank's Project Management Office in the Information Technology Department. ATM�

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