Linfox Armaguard executive chairman Peter Fox
Linfox Armaguard’s executive chairman Peter Fox says his company will comply with all of the undertakings given to the competition regulator before the merger with Prosegur’s ATM and cash logistics business was approved in June.
In an interview with Banking Day after the legal completion of the merger on Monday, Fox said his company would continue to provide cash-in-transit services to independent ATM deployers such as NCR and Next Payments in line with the formal undertaking given to the ACCC.
“We wouldn’t have made the undertaking if we were intending to breach it,” Fox told Banking Day.
The Australian Competition and Consumer Commission approved the union of the two businesses after receiving an commitment from Armaguard that the merged entity would guarantee to supply cash-in-transit services to independent deployers and not exploit its position as a monopoly to extract unsustainable price increases from ATM rivals.
In submissions to the ACCC’s marathon inquiry into the merger application, NCR and Next Payments told the ACCC that combining the Armaguard and Prosegur businesses would create a monopoly in the cash transport sector and force their networks to become price takers.
In the undertaking given to the ACCC, the merger partners volunteered to appoint an independent auditor to adjudicate on complaints from other ATM deployers.
In an apparent softening of his stance on the impact of the merger, Next Payments founder Tim Wildash said he was confident the commitments given by Armaguard and Prosegur would prove effective.
“They are very tight undertakings they’ve provided other participants in the ATM industry that give every possible chance of a fair and just process going forward,” said Wildash on Monday.
“The undertakings were genuinely improved over a six-month period and we see the role of the independent auditor as important.”
Fox said the inaugural board meeting for the merged businesses was due to be held on Thursday in Melbourne, with senior figures from Spanish-owned Prosegur expected to attend.
While Linfox Armaguard holds a controlling interest in the joint venture, Fox stressed that it did not mean Prosegur would be taking a back seat in the operation.
“We think as a global player that there’s a great chance to leverage Prosegur’s capabilities here in Australia,” he said.
“They have a global business, deep knowledge and skills that are valuable.”
Fox indicated that the merger could accelerate the withdrawal of proprietary ATM networks by the major banks and other deposit takers.
“We see a lot of logic for the industry in rationalising the ATM network,” he said.
“It’s crazy to see that banks such as Bank of Queensland, ANZ, NAB, Westpac and St George each have their own ATMs located in the same shopping centres all over the country.
“Our machines (atmx and Precinct-branded ATMs) are customisable – their screens show the identity of the user’s bank as soon as they insert their card in our machines.
“We think there is a benefit for the industry from the creation of a utility.”
Fox observed that public trust in digital banking channels was being tested by the rising incidence of online fraud and scams.
“In other parts of the world the fraud problem is already increasing demand for cash,” he said.
“In those places people don’t trust digital.”
On a separate issue, Fox declined to comment on whether a recent decision by unionised Linfox Armaguard staff to take protected industrial action during the current round of enterprise bargaining would affect the joint venture’s cash-in-transit and ATM services.
The Transport Workers Union last month refused to comment on an application made to the Fair Work Commission to take protected action against the company.
Fox also declined to comment on the matter.
“We have a very good relationship with the union,” he said.
“The joint venture with Prosegur is a lifeline for making cash available to the Australian community and we hope that people can see the benefits that are going to come from that.”