Profile: Better ATM Services Inc.

A Startup’s Technology Turns ATMs into Prepaid Card Dispensers

19, 2007) A Phoenix-area company called Better ATM Services Inc. thinks
it has a better idea for merchandising prepaid cards: sell them
directly at ATMs, with cards dispensed through the same slot that
dispenses cash.

Founded in
2005, the Mesa, Ariz.-based firm is now implementing its ideas at five
local restaurants. Thomas E. Honey, Better ATM Services’ chief
development and marketing officer, tells Digital Transactions News his
company’s patented system gives merchants and ATM owners a new way to
attract traffic with minimal hassle. “We’ve been getting a lot of
interest from ATM ISOs as well as prepaid card processors,” he says.

In the
test, Better ATM Services is the ATMs’ owner but will turn them over to
an independent sales organization later. The Diebold 1064i and 1064ix
cash dispensers are equipped with cassettes that hold three-panel card
sheets consisting of a standard credit card-size (approximately 3 3/8
inches by 2 1/8 inches) prepaid card, an instruction/advertisement
panel, and a coupon, which is an incentive for the buyer. The
perforated media are only 14 mils, or 14 thousandths, of an inch thick,
according to Honey, and are flexible enough to be lifted and dispensed
through the ATM’s cash-dispensing slot. The sheets are about the size
of a larger foreign currency such as the Danish kroner. Better ATM
Services says it has tested its system with three manufacturers and
says cassettes can be easily adjusted to accommodate the sheets.

The sale
process works like a conventional point-of-sale debit transaction in
which the customer’s ATM card account is debited after he enters his
PIN. The ATM effectively becomes a POS terminal, with the card issuer
earning standard network interchange on the sale, says Honey, a former
prepaid and payroll card consultant and veteran of Visa and the NYCE
electronic-funds transfer network. U.S. Bancorp’s Elan Financial
Services unit drives the ATMs and routes the transactions to the
network linked to the cardholder’s card.

to Honey, Better ATM Services will make its money through ISO-paid
licensing fees, fees for active ATMs, and fees paid by card producers.
The company is waiving charges for usage of its patent to those ISOs
that sign up through next June. Merchants and ISOs will set retail

Honey says
one selling point is less time needed by the retailer to process gift
card sales. “It becomes much more convenient for the merchant, you
don’t have to go through all the labor,” he says, adding that merchants
themselves can easily place the card sheets in the ATMs should they
choose, or have their ISOs handle that function.

One of
Better ATM Services’ partners for a three-month test is Mi Amigos
Mexican Grill, a three-location, family-owned chain whose East Mesa
restaurant started dispensing $25 gift cards through an ATM on Monday.
“So far it’s going fine,” says company president David Candland, who
says he’s had five to 10 sales so far. The other two restaurants will
start ATM dispensing after some initial monitoring at the first
location. Candland says he decided to participate in the test because
any opportunity to sell gift cards means more up-front revenue even if
the customer doesn’t come in for a meal for three years. Cards at Mi
Amigos for now are being sold without a retail fee because customers
still can buy them without a mark-up at the bar.

Better ATM
Services’ other test sites are Maycayo’s in Scottsdale and Tavern on
Mill in Tempe. In a release, the company said other uses of its
technology include dispensing of transit passes and event tickets

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