Wincor Nixdorf AG is betting that an ATM that can recycle bills will take off in the U.S. just as it has abroad.
The German ATM maker's newest machines are different from those favored in the U.S. today, which use two different elements to dispense and receive cash, and require couriers to make frequent trips to replenish and empty the separate parts of the machines.
Wincor Nixdorf's new cash-recycling machine, which it announced last week, relies on merchants to make large cash deposits. The same cash is then dispensed to anyone making a withdrawal. The machines also have the ability to count how much cash they hold.
Though Wincor Nixdorf says its automated teller machines can save banks money in maintenance costs, one reason banks might resist this technology is the ATM's reliance on merchant deposits to keep the machines well stocked for consumer withdrawals. Local retailers are hesitant to make big cash drops, analysts said.
To take full advantage of the technology, branches would have to employ just Wincor Nixdorf machines, whereas banks may prefer not to restrict themselves to a single manufacturer.
"They are all alone in this and no one else has these proprietary cassettes. There needs to be significant adoption of Wincor machines in order to make this happen," said Bob Meara, a senior banking analyst at Celent. "It is a new thing and it's pretty cool, but it's obviously very, very limited."
The new ATMs are also expensive, costing between $30,000 and $40,000. A bare-bones cash dispenser is less than $10,000, the manufacturer said.
Already, Wells Fargo & Co. is "taking a close look at the technology," said a spokeswoman. The retail banking company is considering launching a pilot test.
Other "big banks" are following suit, said David Hadesty, Wincor Nixdorf's vice president of strategic alliances and product management. Wincor Nixdorf is in talks with at least two national retail banking companies, he said.
Wincor Nixdorf contends that banks could save money in their maintenance by not relying on armored car services to replenish the ATMs. Instead, tellers swap out a cassette that is full to a machine that is empty.
Meara said Wincor Nixdorf is trying to make up for lost ground. It has been trying to gain a foothold in the U.S. since 2006, and it was the first to introduce bulk cash acceptance.
Rival ATM makers Diebold Inc. and NCR Corp. were quick to follow.
Recently, NCR trumped Wincor Nixdorf with a device that could intermix cash and checks "upside down, backwards and still have it work," Meara said. The cash-recycling machine is Wincor Nixdorf's way of getting ahead, he said.
Even if banks embrace the new ATMs, merchants may not, said Gwenn Bezard, a co-founder and research director at Aite Group in Boston. "If you are a restaurant owner, and you may have like $3,000 that you are feeding to the ATM — that just doesn't sound practical," he said.
Hadesty said the machines "will be inside the lobby, but as vestibules become more common, you will have keyed access," he said. "So you don't have to expose it to the weather. It's not outside like a true island."
Hadesty said Wincor Nixdorf may eventually decrease the cost of some of the technology that this new machine offers to encourage adoption.
As for the future of true recycling in the U.S., Hadesty said that as banks and credit unions move to less populated branches, the case for ATMs such as Wincor Nixdorf's latest is clear.