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NCR banks on the future

Listen to its advocates, and NCR Corp.'s Vcom kiosk-ATM convergence project with 7-Eleven will jump-start the kiosk-ATM convergence sector. But one nagging question remains: Can this machine actually succeed?

August 25, 2002

In any great technological advance, the key issue that drives the advance often is not the quality of the technology, but the virtues it presents for its target audience.

The telephone allowed people to contact friends and family across town or across the country, something that was not possible before. Of course, it has been accompanied by generations of nefarious abusers (crank callers, telemarketers), but in general the positives outstrip the negatives.

More recently, the Internet has made it possible to gather and share information across channels that were unthinkable just a decade ago. Australian Rules Football fans in the United States, for instance, can read the football news from Melbourne's daily papers at the same time as Melbournites. Of course, the Internet has invigorated the pornography industry, but again, the good tends to outweigh the bad.

KIOSKmarketplace.com editor John Harrell

The NetWorld Alliance road trip to Dayton, Ohio, this week for NCR Corp.'s Self Service Summit -- comprising myself, ATMmarketplace editor Ann All, and general editor Rick Redding -- was another reminder of the impact technology can have on everyday life. But unlike telephones or the Internet, it remains to be seen if the technology on display in Dayton will step into the pantheon of technological excellence.

Communicating with the Vcom

Readers of KIOSKmarketplace will have noticed the rich abundance of stories concerning the Vcom project in recent weeks. Ann's powerful work ethic and the ever-optimistic push for kiosk-ATM convergence have given the Vcom a home at the Web site.

For the kiosk industry, finding a way to piggyback on a mature, thriving industry such as ATMs is part of the natural progression from infancy to adulthood. For the ATM industry, convergence with kiosks in a financial service setting is an ideal way of adding some much-needed versatility.

Vcom is housed in a boxy, silver colossus called Personas 78. With a phone on one side and various slots for checks, debit cards, and wads of cash dotting the unit, the Personas 78 is a dream unit for technology wonks who cannot get enough functionality.

NCR officials will tell you the machines have limitless potential, which is why 7-Eleven stepped up to the plate -- after rejecting several similar projects following their trial phases -- and will deploy 1,000 Vcom units over the next seven months.

So the technology is there. But before the kiosk industry marks this as the launch of the kiosk-ATM convergence era, one fundamental question remains: Will people actually use these units?

Making it all add up

The units will have to get busy and stay industrious to be effective. Using a generic business model, NCR said units similar to the ones used in the Vcom project would have to accept 1,500 ATM transactions, 750 check-cashing applications, 500 money orders, and 100 wire transfers monthly for 30-to-32 months to pay for themselves. 

That comes out to 2,850 transfers per month, or roughly 90 to 100 transactions per day. Normally, such numbers should not boggle the mind. But are there enough people requesting money orders and wire transfers these days to make that math viable across 1,000 units?

According to 7-Eleven, the C-store chain annually sells more than four billion money orders and handled more than 100 million ATM transactions.

For 1,000 Vcom units to achieve NCR's goal of paying for themselves in 30 to 32 months, they must transact a combined total of 18 million ATM transactions and six million money orders annually.

In essence, nearly one-fifth of 7-Eleven's ATM traffic must go through the Vcom in order for the program to cash out in less than three years. The chain currently has about 5,700 locations in the U.S. and Canada, putting that figure within reach. But the margin of error is still extremely thin.

It is ours Â… and we like it

Beyond the numbers there is an even more contentious issue, that of customer empowerment.

In order to work, the Vcom has to demonstrate that it is fulfilling a need that people desired but could not obtain before now. Customers could obtain money orders in the past, but had to do it through a clerk. The process has now been transferred from the clerk to a machine, so technically it falls within those parameters.

Just as important, however, is the ease of use factor. The telephone requires a hook up and the ability to punch buttons; the Internet requires a dedicated phone line and a sense of adventure.

But Vcom requires skill and trust -- factors that make it easy to use only if you are willing to use it enough times to get the hang of it. On most functions, Vcom's touchscreen requires users to traverse numerous options and directions to get to the finish line. Make a mistake and, well, start over again.

The trust factor, however, may be the trickiest one for 7-Eleven and its partners to overcome. Having spent a lifetime handing checks to the clerk or the teller, people may feel less comfortable sticking the paper in a slot, wondering what will happen if the machines return neither cash or the check.

The same goes with the unit's bunch cash acceptor. Having spent years experiencing the frustration of soda machines rejecting dollar bills for minor creases or tears, consumers may not jump with joy at the thought of feeding multiple bills into a slot at one time, instead feeling currency anxiety that the machine will eat their funds.

These are important issues for NCR, 7-Eleven, and the other companies involved in Vcom. Education, quality control, and promotion are the keys. Making sure customers know about the technology and how to use it, will give the Vcom every chance to succeed.

After all, creating the technology is one thing. Making it ubiquitous is a completely different challenge. Just ask Alexander Graham Bell or whoever really invented the Internet.