HONOLULU – A $330 million credit union based in Hawaii has become the first and only credit union in the United States to retail ATMs. Honolulu City and County FCU is placing ATMs, manufactured by Fujitsu, first with other credit unions in the Hawaiian Islands and then with other non-credit union deployers as well. "I agree, when you first think about it, it seems unlikely that Hawaii, an island, would provide much of a market for ATMs," said Kent Schrock, director of financial systems marketing for Fujitsu. "But in reality the Island's importance as a tourist destination makes them a good candidate and there has not been much deployment already," Schrock said. He noted the Hawaiian islands get a lot of visitors who have ATM cards and who are ready to spend money. The initial opportunity arose almost by accident, according to Wallace Watanabe, CEO of the Honolulu City and County Employees Federal Credit Union. "We wanted to place more ATMs and approached Macy's West," Watanabe said. Macy's operates 11 stores across the Island chain and initially only wanted two Fujitsu 8000 series machines for the stores. Machines from Fujitsu's biggest rival on the islands, Diebold, were slated for the other six. "But the Fujitsu machines just blew them (Macy's) away," Watanabe said. The store managers were very enthusiastic about the advertising possibilities the machines provided, he reported, and the store chain wanted to make sure the ATMs were in more prominent locations than were originally planned. "At first they wanted the machines in sort of out of the way places," he said, "but now they want them in major traffic areas with advertising around them and an almost kiosk-like approach." The burst of interest from Macy's has been problematic, Watanabe said, because the credit union didn't have the machines on hand to supply the demand. But Fujitsu said it anticipated having the needed machines in the islands by the end of the first quarter of 2003. Fujitsu's 8000 series machines have so-called "dual monitors" that offer interactive displays that can contain news, weather reports, in-store advertising and messaging, the company said. That additional ability lets the retailer add advertising into the ATM screens more easily, Fujitsu said, updating and changing the messages to match different shopping patterns. Macy's operates 139 stores around the country and Macy's executives have expressed interest in replicating some of their experience in Hawaii in other locations in the continental United States. "I hope we can have a piece of that business too," Watanabe said, chuckling. Part of Watanabe's confidence stems from the knowledge that the credit union had to beat out the islands' two biggest banks for the business. He admitted that the credit union had to surcharge transactions on the Macy's machines in order to compete with the banks for the contract. The credit union does not surcharge transactions on its other ATMs, Watanabe said. The machines can cost between $15,000 and $30,000, depending on how they are configured, Schrock said. The credit union supplies the ATMs through a CUSO that will provide software support, Watanabe said. Fujitsu will provide hardware support through firms on the islands. Watanabe admitted that most of the Island's 100 credit unions are quite small, less than $5 million in assets, but also noted that the CUSO can market any of Fujitsu's machines, including those which could cost less and not need as many transactions to be viable. But Schrock was confident that credit union members' loyalty will help keep traffic at credit union ATMs high enough to justify more deployments, if not of the Series 8000 machines than a lower cost alternative. [email protected]