At a press conference held today, First Union Corporation, the nationâs sixth largest bank holding company, announced a partnership agreement with Card Capture Services (CCS). Through the partnership, CCS will initially place and manage 500 ATMs for First Union Corp. The agreement is the largest of its kind to date, and marks a new trend in bank ATM strategies.!
As part of the agreement, First Union assumes the hardware cost and will provide the cash for the ATMs in retail locations nationally. CCS will continue to manage maintenance, processing, media, cash, and the relationship with the retail locations. The machines will retain CCSExpress signage. CCS and First Union will share transaction revenues. The announcement coincided with BAIâs Retail Delivery show, the banking industryâs largest conference, held in Las Vegas.
According to Al Sale, Executive Vice President of First Union, âCCS offered a cost effective way for First Union to quickly expand an ATM network without the corresponding infrastructure costs typically associated with ATM management. Although First Union has similar ATM deployment capabilities, in this instance CCS offered us a very efficient speed-to-market opportunity. All future transactions will be negotiated based upon the strengths of each partner.â
Outsourcing more profitable
A recent study by Dove & Associates reveals that, on average, independent ATM programs enjoy a cost advantage over bank programs. According to the study, the average cost for a bank to operate an off-premise ATM is $1,090 per month. For large banks, this number climbs to $1,180. The average cost per month for an independent ATM company is $703. Recognizing this advantage, in late 1997 CCS designed an ATM bank placement and management program modeled after its successful merchant-owned ATM program.
How CCS works with First Union
CCS works with First Union to develop and execute ATM strategies that expand brand presence and increase ATM profitability. Through CCS, First Union is able to tap nearly 5,000 existing ATMs in retail locations, including national and retail chains, a dedicated ATM sales force, site research capability, 24-hour customer service and monitoring and cash management.
ATM outsourcing seminar Thursday, December 4
ATMs in non-bank, or off-premise, locations are the fastest growing and most competitive segment of the ATM industry. Consumer demand for convenience, profit potential and banksâ national expansion strategies are driving off-premise growth. Formerly competitors for off-premise placements, banks and independent companies such as CCS and First Union are now forming unique ATM partnerships.
Dave Grano, president and CEO of Card Capture Services will discuss the economics of off-premise deployment as part of a panel of experts at the Retail Delivery conference on Thursday, December 3 at 3:15 p.m.
About First Union
First Union Corp. is a leading provider of financial services to more than 16 million customers throughout the East Coast and the nation. First Union has the fourth largest ATM network in the nation with more than 3,700 ATMs, is the nationâs sixth largest bank holding company, based on assets of $235 billion as of September 30, 1998, and ranks among the top 15 financial services companies in the world, based on market capitalization of $63 billion. The company operates full-service banking offices in twelve states and Washington, D.C.
With nearly 5,000 ATMs, Portland, Oregon-based CCS is a leader in off-premise ATM placement and management. To date, the company has become the outsource partner for 33 banks of all sizes. CCS recently opened offices in Canada and Mexico. For more information about CCS, visit booth # 4728 at BAIâs Retail Delivery â98 conference, or the companyâs web site at [www.CCSExpress.com].