The battle for control of Australia’s ATM management and cash logistics sector is intensifying as Lindsay Fox’s Armaguard group and Spanish giant Prosegur vie to acquire the offsite ATMs of several major banks.
NAB and ANZ are reviewing the configuration of their existing ATM networks and have each issued requests for information from external providers interested in buying their non-branch automated tellers.
While there is no guarantee that either bank will proceed with selling their offsite fleets, cash management firms are viewing the ANZ and NAB moves as the next stage in the evolution of a pooled ATM service in the banking sector.
“We recently engaged a number of companies to explore options for future ATM and cash management services,” an ANZ spokesman said on Tuesday.
“We have not yet reached any decisions on this so we have no further comment at this stage.”
The case for an ATM utility is growing as consumers gravitate to digital payment methods and banks withdraw uneconomic automated tellers from regional and remote parts of Australia.
Three of the major banks – Westpac, ANZ and NAB – have been discussing the prospect of pooling their ATMs for at least three years, but they have not been able to win support for the idea from Commonwealth Bank.
CBA has a longstanding view that its large ATM network constitutes a strategic marketing advantage over its rivals, particularly in regional parts of the country.
A CBA spokesman last night appeared to indicate that the company’s strategic positioning in the ATM market was not likely to change.
“Our decision in September 2017 to cut ATM fees for all Australians, which prompted an immediate reaction from the other major banks, has already delivered convenience and cost savings for Australian ATM users,” the CBA spokesman said.
Regardless of whether CBA sticks to its current strategy, the other three major banks now appear to be moving in lockstep on ATM strategy.
Banking Day has been told that Armaguard and Prosegur have made submissions to both ANZ and NAB about buying their offsite ATMs.
Prosegur last year secured ownership of around 750 offsite Westpac ATMs and would emerge as a default utility provider to the banking sector if it was able to win control of the non-branch ATMs now owned by NAB and ANZ.
Armaguard also has been deepening its capability in the automated teller market after the purchase in August last year of Cuscal’s RediATM business.
That acquisition gave Armaguard control over about 700 machines that directly service customers of Suncorp, Bank of Queensland and 25 mutual banks.
Armaguard is the main cash logistics provider to most of the major banks and holds service contracts for maintaining ATM fleets operated by CBA, NAB and ANZ.
It stands to lose its strategic position in the cash logistics industry if Prosegur is able to secure control of more non-branch ATMs from other major banks.
The cash logistics war between Armaguard and Prosegur is erupting in other industries, particularly the retail sector where the Fox-owned company’s leading market position is being challenged.
A major battle is being fought by the two companies for the right to manage the movement of cash across the Woolworths supermarket business.
While Armaguard currently holds the cash logistics mandate from Woolworths, Banking Day understands that Prosegur has committed large resources to winning the lucrative contract.
Woolworths is expected to announce the successful bidder in September.