Article

Kiosks get their due in Dayton

NCR's annual Self-Service Summit gives ATM executives an opportunity to hear the company's vision of the financial services future. This year, however, the K word was more than just a passing fancy.

August 14, 2002

DAYTON, Ohio -- NCR Corp. calls it the Self-Service Summit, and for the 50 to 60 ATM executives and managers who have annually attended the summit since its launch in 1999, it is an opportunity to meet with NCR executives and discuss the company's financial services direction.

But for the attendees at this year's summit, which took place Aug. 13-14 at NCR's world headquarters in Dayton, Ohio, there was a new segment to the industry, one that brought the dynamic of kiosk technology to the mix.

While it did not receive the play that the straight ATM seminars were given, there was room at the conference for NCR executives to discuss the company's Vcom project with 7-Eleven.

The financial services kiosk, which offers check cashing, wire transfers, and Western Union money orders along with basic ATM functionality, is preparing to shift from the trial phase to initial rollout. The current crop of 94 units at 7-Eleven convenience stores in Florida and Texas will soon be augmented by kiosks at 1,000 additional 7-Eleven locations.

"The 7-Eleven deployment will start to kick start the community and make them realize this is something they need to do," said Phil Kasper, NCR assistant vice president, ATM Self-Service Division, Americas region.

And NCR spent a good chunk of the two-day event evangelizing its drive to transform kiosk-ATM convergence into a killer application.

The lowdown

NCR devoted several sessions during the first day of the two-day summit to the Vcom. While the financial services equipment company was speaking to a group of ATM figures, it was clear that kiosks were on the mind as well.

For an executive like Bob Tramontano, NCR vice president of global marketing, self-services division, the presence of Vcom offers the company an opportunity to create market share and revenue in a sector where NCR has not fared well previously.

NCR showcased its Personas 78 unit, which houses its Vcom project with 7-Eleven, at the 2002 Self-Service Summit.

"I can't tell you we've ever really made money on kiosks and I can't say that any of our customers have made a lot of money on kiosks, but it's gotten the name and product out in front of customers," Tramontano said.

During a session on global market strategies, Tramontano offered an optimistic view of the Vcom's potential. As an "ATM-on-steroids" model with advanced functionality, the Vcom enables NCR to expand its technological focus while relying on one of its core businesses, according to Tramontano.

"The kiosk can be a more viable entity because of the ability to plug it in and get it into the Internet channel," he said. "In a lot of countries where people don't have Internet access at home, they go to a bank and use the Internet there to get online with the bank. Now you ask `Why would someone go to the bank to get to the bank's Web site?' Well, I've gone to those banks and the lines are going out the door."

Taking it to the people

But with the business model created by NCR for 7-Eleven, Vcom has to succeed at U.S. convenience stores before it can make a splash at foreign banks. In order for the Vcom to succeed -- and generate continued interest in kiosk-ATM convergence -- the machines have to prove they are financially sustainable.

Traffic, as a result, will be essential to making the Vcom a success. During the Convenience Connexions breakout section of the summit, Kasper estimated that the units would be paid off within 30 to 32 months of deployment provided they generate 1,500 ATM transactions, 750 check-cashing functions, 500 money-order purchases, and 100 wire transfers monthly.

Along with surcharges for ATM transactions, fees are levied for money-order purchases and check cashing, with those charges set by retailers.

"The business case was strong enough that 7-Eleven was comfortable with taking this to the board and getting approval from the board," Kasper said.

"We're interested in this maturing as a market. NCR has invested a lot in marketing to stimulate this," he added. "We don't believe everyone will step up to this; there won't be hundreds of thousands of these like there are with walk-up cash dispensers. But there will be tens of thousands of them."

Education is just as important as marketing when it comes to making the Vcom a success, according to Mosaic Software executive vice president of marketing Chris Klein, who reasons that this is why the program is better off starting at 7-Eleven than at a bank.

"You not only have to have the technology, but you have to educate people as to what's out there," said Klein, whose company is providing switch services for the project. "Retailers do this better than banks. Wal-Marts and 7-Elevens are the perfect vehicle for driving people to these boxes and teaching them what's out there."

Kasper expressed similar thoughts, but added that financial institutions should be considering action, not studies.

"As we're pacing ourselves with 7-Eleven, we're still working with bank deployers," he said. "They need to be worried about what might happen to that venue (supermarkets, convenience stores) when somebody else comes in and offers a money order/check-cashing/financial kiosk. Those people will then wait until the bank license runs out and, boom, go after the ATM as well."

Exhibit A

Following a morning of general sessions on Aug. 13, the summit split into two groups -- technology and business -- that met for more specialized discussions.

But a highlight for each group during this portion of the summit was a trip to the Anderson Center, where NCR officials walk attendees through a show-and-tell session of new products and services.

Amid the new "toys" that were showcased in the center was the Personas 78, the unit that houses the Vcom. Big, silver, and boxy, the Personas 78 features enough gadgets to suggest its multi-functionality. Card and coin dispensers, a bunch note cash acceptor, card reader, telephone, keyboard, and touchscreen monitor all vie for space on the unit.

"It's a real example of the innovative and applied technologies with the business case behind it," said Steve Kremer, NCR director, ATM Center of Expertise. "It turns the corner in terms of functionality and the revenue streams that go with it.

"We've had a lot of conversations with customers who say this is the future and it might be a new style of full functionality," he added.

The Personas 78 was not the only unit showcased in the Anderson Center with a kiosk twist.

NCR showcased biometrics with Bud, an ATM that featured iris-recognition capabilities to verify customer IDs. Another project, Granny, offered a less formidable take on the Vcom philosophy. Much smaller than the Personas 78, Granny features a touchscreen that offers address books and maps while customers withdraw their funds, and printed receipts featured horoscopes.

The project is named Granny because NCR, reasoning that you cannot trust anyone more than your own grandmother, offers an animated matron on the site. Granny, through speakers on the ATM, peppers each customer with the kind of cautionary messages one would expect from their grandmother ("Spend wisely," for example), while transactions are being processed.