GRGI a third ASX ATM play

A vision of a cashed, rather than a cashless, society continues to inform the plans of niche providers to the banking sector. One start-up seeking capital from an ASX listing is an aspiring deployer of automatic teller machines, GRG International.

Formed only in January 2010, GRGI is seeking to sell $3.5 million in shares at 20 cents a share, equal to 17 per cent of the company.

GRGI has so far sold or deployed 230 ATMs in Australia, mostly in petrol stations operated by United Petroleum. None of this produced any revenue for GRGI, according to the prospectus.

In the short term the plan is to undertake direct sales and development of its own ATM fleet in Australia and there are later plans to deploy ATMs in New Zealand, Britain and Ireland. In Australia GRGI will compete with the long established ATM fleets of banks and existing independent deployers such as First Data and Customers.

Its connection with GRG Banking, a maker of ATMs in southern China, is one basis of its pitch for the share sale. GRG Banking owns seven per cent of GRG International prior to the offer.

Jeffrey Barrow and Brian Kett, two former executives of Triton, another ATM maker, are the key executives behind GRGI. Barrow worked for four years as managing director of Direct Cash, a small deployer of ATMs.

While the GRGI float is small beer, the interesting detail in the prospectus may be the disclosure of some of the pricing of Bendigo and Adelaide Bank for payment processing.

Bendigo will pay GRGI 81 cents for each cash withdrawal and 20 cents for each
balance inquiry.

The bank will pay United Petroleum 58 cents per withdrawal if GRG owns the ATM and 75 cents if United owns the ATM.

GRG will also pay Strategic Payments Services 16 cents for switching
each transaction and will pay Bendigo and Adelaide Bank two cents for
settling each transaction. SPS will also provide "additional services" at $1200 a day.

GRG will pay United either $1.26 or $1.53 per transaction depending on whether staff fill the ATM from the till or Armaguard do that task.