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ATMs on the move

By Ann All, editor

March 19, 1999

Advances in hardware and software have made it possible to put ATMs on the road, in the middle of the ocean and even 35,000 feet in the air. Some deployers are willing to go those extra miles to find customers.


Sky’s the limit
Inflight ATI hopes to make the ATM as ubiquitous as the drink cart on long flights. The Orange County, Calif. company, which has already put trash compactors and espresso machines in the air, is developing an ATM for airplanes.

Exchanging currency on the plane rather than at the airport is a welcome alternative for tired travelers, said Inflight ATI president Thomas Lee. He cited market research that showed up to 58 percent of international travelers would use an ATM on a plane. “When you combine foreign exchange with an ATM, you have a very attractive product,” he said.

Lee said the ATM’s software recognizes up to 150 currencies, or “about 25 countries’ worth,” and will exchange them for the currency of a flight’s destination. As a user inserts bills, the screen displays a list of each currency with total amounts.

“You don’t have to tell the machine what you’re putting in,” he added. “You can walk up to the ATM with a Singapore dollar, followed by a Japanese yen, followed by a Korean won.”

The machine dispenses up to four denominations, two each of notes and coins. Because it’s connected to a plane’s navigational system, the ATM always knows where it’s headed and which currency to dispense.

The ATM also will accept major electronic payment cards such as MasterCard, Visa and American Express. Inflight eventually hopes to include cards that are unique to certain geographic regions, such as the JCB card widely used in Japan.

Lee thinks its ability to accept both cards and cash sets his company’s ATM apart. “To our knowledge, we have the only ATM in the world that combines card to cash and cash to cash capabilities.”

To keep costs down, Lee said cash replenishment and other servicing will take place at an airline’s base or at a hub in its home country. “If you’re a Singapore airline, all servicing will be done in Singapore, no matter where you fly.”

A typical machine is 14 inches wide, 30 inches high and 18 inches deep. Constructed almost entirely of aluminum, the ATM weighs about 200 pounds when filled with currency. Lee said his company worked with manufacturers to find parts that could be made of aluminum rather than steel without sacrificing functionality.

One of the biggest challenges was devising an online transaction approval system, which Lee said is necessary to reduce the risk of fraud. Inflight plans to transmit information through a plane’s onboard satellite communication system using an X.25 packet network. Data 2, an existing channel used for cockpit communications, weather reports and other flight information, was off-limits for commercial applications. So Inflight came up with Data 3, a TCP/IP-based protocol for third-party commercial data.

In a test run on the airlines’ SITA communications network, Inflight was able to process transactions using Data 3. “Our best time was 11 seconds, which we think is more than adequate,” Lee said.

Although the Inflight ATM is still in the final stages of development, Lee said the company already has a customer for Data 3. Beginning in May, Hong Kong-based Cathay Pacific will use the technology to authorize credit card transactions for duty free shoppers.

Because 25 percent of passengers don’t carry credit cards, Inflight created a special debit card that passengers can get at the ATM, then use to pay for airborne entertainment like movie rental, duty-free shopping and casino games of chance. Toward the conclusion of a flight, a passenger can exchange any remaining value on the card for currency at the ATM.

In addition to cash and debit cards, the terminal can dispense such products as stamps, prepaid international phone cards or travelers’ checks.

ATI plans to provide ATMs at no cost to airlines in exchange for a cut of interchange and financial exchange revenues. Surcharging is also a possibility, “where legal and appropriate, based on an airline country’s requirements,” Lee said.

Ahoy, matey!
For Chris Klein, senior vice president of ATM systems at BankAtlantic, one statistic stands out when it comes to cruise ships. “On any seven-day cruise, 65 percent of passengers are out of cash by the end of the fifth day,” he said.

Because Klein recognizes a market when he sees it, the Fort Lauderdale, Fla.-based bank has deployed 27 ATMs on ships owned by Celebrity, Carnival and Royal Caribbean. More will be rolled out this year. In fact, three ATMs are slated for installation on one ship, Royal Caribbean’s huge “Voyager of the Seas.”

Many passengers embark on a cruise thinking everything is paid for, without taking into account expenses like gambling and shopping. Cruise lines are reluctant to deal with checks and credit cards because of liability issues. So, Klein said, “The cruise line went from being a gracious host to being a bad guy because they told you no, and passengers’ anxiety levels were going through the roof.”

ATMs are popular on cruises, where the average withdrawal is a hefty $148 to $155. Passengers don’t even object to a $5 surcharge.

“I haven’t had one complaint about it,” Klein said. “No matter how you tried to present it before, if you had to come to me and ask for a cash advance, it was intimidating and embarrassing. Now it’s between you and your bank.”

Klein’s biggest logistical problem is providing cash replenishment and other maintenance services for ships that may be in the Caribbean one week and the Mediterranean the next. “You have to keep track of where the ships are and when their schedules change, so you don’t have your armored car service showing up in Miami when the ship is in the middle of the Panama Canal,” he said.

Klein provides some training, so ship staff can fix paper jams and other minor problems. “Ninety percent of your problems are first-line maintenance like receipt or bill jams. If that happens on the first day of a seven-day cruise, it’s going to be a few days before you can get service at a port,” he explained. “We give them keys and teach them how to do it, so they can do some pretty basic first-line stuff.”

Satellite communications were the only possibility for the constantly cruising ships. Transactions are routed from the ATM to a cruise line’s operations center to BankAtlantic, and then on to other banks and networks.

The process is totally transparent to the end user, Klein said. “As far as our host processor knows, they have no clue it’s on a satellite.”

BankAtlantic is developing a new application geared to the tip-conscious culture of a cruise. Cruise lines recommend tipping for waiters, stewards and other service personnel, and even leave envelopes for that purpose on passengers’ beds. Soon, ATMs will make it easier on passengers by automatically calculating tips using percentages provided by the cruise lines.

“Right now people are running to the ATM and then running to the purser trying to get all of this change, and to make sure they get the right amount in the right envelope. Also, they have to make a conscious decision on how much to tip,” Klein said. “With our new tipping package, you won’t have to worry about it or even think about it. You can get it right from the ATM.”

ATMs on wheels
Mobile Automated Teller Terminal Systems (M.A.T.T.S.) customizes vehicles to carry ATMs just about anywhere, including to the last four Super Bowls. Clients, mainly financial institutions, use them for marketing opportunities at special events, for disaster recovery and sometimes to replace “brick and mortar” branches.

Matthew Fuller and partner Matthew Boga (yes, two guys named Matt), launched their Reno, Nev. business after a less than positive experience with a customized recreational vehicle at the Bank of Hawaii.

Fuller, the bank’s former ATM manager, said the 40-foot vehicle was “too big, cost too much and was a nightmare to maintain.” He used the $250,000 RV for three years before deciding ”I could build one of these better and for less money.”

After relocating to the mainland, the two started with a 22-foot bus chassis equipped with two ATMs, a generator and air conditioner. Since then, they’ve developed a variety of other products, ranging from a 6-foot portable ATM unit on a trailer to a 32-foot vehicle that offers most of the amenities of a standard bank branch.

The portable unit is popular because of its $30,000 cost, while M.A.T.T.S. hasn’t had many takers for the $175,000 mobile branch. The company has sold more than 40 units in five years.

Mindful of their own experiences, the two never start with an RV chassis. “Those were really designed for mom and pop to take out for a couple months every summer,” Fuller said. “But a bus chassis, it’s designed to run day in and day out, nonstop. It’s built better than an RV.”

Because they’re built from the ground up, M.A.T.T.S. can include whatever features a client requests. For Wells Fargo, the company built two 22-foot units with hydraulic lifts that took the ATMs out through the side of the vehicle and lowered them to the ground. Wells Fargo sought the lift to comply with Americans With Disabilities regulations.

Mobile ATMs make more sense than standard machines at many locations. A Seattle credit union wanted to build a kiosk at a ballpark, but decided on a mobile version after realizing there wasn’t enough foot traffic when baseball season ended.

Fuller noted that banks can earn community reinvestment credit by taking the units into underserved areas. For smaller community banks, “it’s something they can do that shows they’re an aggressive, progressive, leading technology type bank.”

Fuller said some large banks who have been less than successful with mobile units of their own have come to M.A.T.T.S. for help. “The idea is to make a turnkey for the client. We don’t want them to have to redo their host, or buy new software or reconfigure anything.”

Thomas Lee of Inflight ATI at TLeeATI@aol.com
Matthew Boga of M.A.T.T.S. at mboga@matts.com

This article was provided by ATMmagazine.com, an online magazine covering the automated teller machine industry.

First published on bankinfo.com -- 9/8/99