Article

Five considerations for cash dispensers

Installing ATMs or financial kiosks? Dispensing cash the wrong way can cost money and cut ROI. Here are five things to consider to do it right.

June 4, 2006

Dispensing cash is trickier than it looks. It requires resources, security and an effective strategy for stocking and maintaining the machines. These are all things that potential deployers should consider aside from the base cost of a cash dispenser.

We asked Self-Service & Kiosk Association member ArcaTech Systems' Jim Ekeland, new business developer, to explain a few key concepts to consider when purchasing a bill dispenser:

1. What will it do?

The type of cash dispenser needed depends on the situation in which it will be used. For example, ArcaTech's dispensers can dispense as few as two notes per second or as many as seven, depending on the unit. In a small volume environment, speed isn't as crucial, but in a high-volume environment, like filling armored cars or retail store cash drawers, slow dispensers can cause a serious labor expense. It's also important to be aware of how the unit's speed is measured.

"Most people measure the speed of the path of the bill through the machine," Ekeland said. "What you should measure is the total transaction time. The time it takes to enter it in, the path speed and the time it takes to dispense the bills. And the path speed can be interrupted by a rejection: a bad note or a faulty note, or a double pick, when it inadvertently grabs two bills instead of one. That happens frequently in everyone's machines."

2. Where will it go?

A dispenser in an outdoor ATM or kiosk will need to be much more durable than an indoor dispenser. And while some dispensers are made for outdoor use, Ekeland said extreme temperatures and bad weather can put extra wear and tear on the dispenser.

"We put these machines in casinos and they run heavy, heavy cash (volume)," Ekeland said. "They out-pace banks three to one. The environment in a casino is usually so dirty and smoky and when the machines come in for servicing they get cleaned and the nicotine on the belts and gears and parts is just amazing."

3. How much money will it dispense?

Dispensers can hold as little as a few hundred notes in a single container, or thousands of bills in multiple cassettes. It's important to remember that maintenance visits, which can be especially costly for an off-site dispenser requiring armored car visits, can be lessened if the machine can hold more bills. Also, not only is the total amount of cash important, but so is the total amount of each currency, depending on the denominations needed.

"You really have to assess your business and how much cash you go through in the course of a day, or a week, or whatever, and you also have to take a note of what denominations you go through in relative volume," Ekeland said. "And that will point you need to know how many tens, how many twenties, how many fives do you need to store."

4. What are the software requirements?

Ekeland said software requirements depend on the dispenser's application. Typically, middleware will be implemented to tie the dispenser into the pre-existing system. Windows-based systems, for example, often use Win ACD software to control the dispenser. He said software implementation is usually a smooth process for a bill dispenser.

"We have not stumbled into big problems," Ekeland said. "It's minor problems, user error, temporary glitches that somebody overlooked or users pushing the wrong button at the wrong time. If they're brand new, mistakes happen. Sometimes they back up the system until somebody who knows what it's all about can walk them through it. Usually a telephone call can fix all the problems. It's usually in set-up where somebody has the wrong designation for the wrong bill in the wrong cassette."

5. How will it be maintained?

Ekeland encourages potential buyers to budget for the total cost of ownership over the life of the machine when buying a cash dispenser, rather than just the up-front costs. Issues like being able to change assigned cassette denominations in the field can amount to significant costs over the life of the machine.

"As a rule of thumb, we kind of use 10 percent per year of the purchase price for maintenance, and that's a real broad guideline," he said. "It could be much less, it could be much more. It depends on the volume."