NCR’s Australian managing director Andrew Wingrove
The battle for control of Australia’s automated teller market has taken another twist after global ATM provider Cardtronics was granted authorisation by the ACCC to market its ‘Allpoint’ network to local banks and financial institutions.
The authorisation clears the way for Cardtronics to compete for ATM provisioning deals with Australian banks against Armaguard and Prosegur.
Banks are rationalising their ATM fleets as the customer shift to digital payments alters the economics of operating proprietary cash networks.
Cardtronics’ attempt to muscle in on the carve-up of the banks’ proprietary fleets follows recent deals involving ANZ and CBA to sell non-branch machines to Armaguard and Westpac’s decision in 2019 to offload a fifth of its network to Prosegur.
Armaguard has since rebranded the former ANZ and CBA machines to its ‘atmx’ moniker while the Westpac ATMs have been rebadged to operate as part of Prosegur’s ‘Precinct’ network.
Cardtronics, which was acquired by Atlanta-based payments technology giant NCR Corporation last year, is believed to be in confidential talks with several major banks and a string of customer owned institutions about subscribing to its Allpoint-branded network.
While Cardtronics’ effort to participate in the shake-up of the ATM market is comparatively late, it might stand a chance of upsetting the strategic agendas of Armaguard and Prosegur because its business case is highly differentiated.
Cardtronics says it already operates 7500 machines across Australia, including thousands in rural and remote areas.
Most of those machines are now being joined to Allpoint’s standard surcharge-free international network of 55,000 ATMs.
The standard Allpoint network allows cardholders to make cash withdrawals.
Many of the Cardtronics machines, particularly those in regional areas, will also be joined to the Allpoint+ network that allows cardholders of subscribing institutions to make deposits at ATMs.
Local banks that strike deals with the NCR subsidiary will automatically be giving their cardholders free access to ATMs located throughout the United States, Canada, Mexico and the United Kingdom.
That is a mark of strategic and commercial difference that Armaguard and Prosegur cannot presently match.
NCR’s Australian managing director Andy Wingrove said the focus of a planned reconfiguration of the existing ATM network would be to widen its presence in regional parts of the country and to upgrade all machines with Allpoint capability.
“There is a big issue of banks reducing their footprints in regional areas,” he said.
“Our plan is to have half of our ATMs located outside metropolitan centres.”
Wingrove said Cardtronics had a two-part strategy for renewing and upgrading the fleet.
“The first part is to enter agreements with banks to give Australian cardholders access to a surcharge-free cash network,” he said.
“The second part is about using NCR technology to offer deposit services and other service solutions in an ATM-kiosk format.”
Cardtronics’ application to the ACCC drew opposition from Armaguard which relies on NCR machines and software to operate its atmx network.
Armaguard told the regulator in a written submission that it would be placed at a potential competitive disadvantage if a subsidiary of its major supplier was allowed to compete against the atmx network.
Armaguard said it was concerned that authorisation of the Cardtronics’ application would increase NCR’s incentive to “jeopardise rival ATM operators’ – such as Armaguard’s – ability to acquire ATM hardware and software services”.
The ACCC found that authorisation of Cardtronics’ ability to leverage the Allpoint network would “likely to result in public benefits through promotion of consumer choice and enhanced competition for ATM transaction services and retail banking services, including deposit taking services”.
The regulator also found that the arrangement was unlikely to result in any material public detriment.
As reported previously in Banking Day, it is believed that Armaguard and Prosegur have begun to explore opportunities to co-operate on the rollout of new ATMs to rural and remote communities.
This might indicate that both providers are willing to embrace the “utility industry model” advanced for several years by the Reserve Bank of Australia.
Given NCR’s commitment to renew Cardtronics’ presence in the local market, pressure could mount on Prosegur and Armaguard to invite other industry players to participate in the deliberations.