ARLINGTON, Va. – Credit unions shopping for ATMs are very much like consumers shopping for cars, according to industry authorities. There are a lot of models, and each model has features the credit union can add, but all the features are going to carry a cost and almost everything about the deal is negotiable. Credit unions are liable to be significant purchasers of ATMs in the next two years. Alan Falconer, Vice President of the Dearborn, Michigan-based Paragon Data Services is on record as estimating that between 35 and 40% of credit union-deployed ATMs may have to be replaced before 2005 in order to comply with new data encryption standards. So what should a credit union looking to replace an ATM or deploy a new machine into a new location know as they go shopping? "They probably ought to know that many, many different parts of the purchase are negotiable," said Jim Hanisch, Executive Vice President for Corporate Development for the CO-OP Network, headquartered in Ontario, California. There really is nothing like a set sticker price in ATM sales, Hanisch added. Hanisch noted that the car buyer analogy was especially appropriate to ATM sales because, just like car purchasers, credit unions often have very unique needs for their ATMs that are unlikely to fit any one manufacturer's or model's standard package. "Everyone is going to have a standard set of models that serve as the base," Hanisch said, "but then you can get all these different bells and whistles that a credit union might need their machines to play. Do you want a machine to accept deposits? Dispense coins? Enable balance transfers? Take loan and other payments? Offer other products? You can have all that, but it's going to cost," he said. Hanisch stressed that he is not in ATM sales himself and that the ATM manufacturers are notoriously private about their pricing, but he estimated that in most cases a machine that interests a financial institution, as a base price, would run about $20,000 and that with bells and whistles the price could reach $30,000 and higher. "But all those things are negotiable," Hanisch said. They are negotiable because most credit unions will often condition their purchase of the ATM on the type of deployment they are going to make, Hanisch explained. A stand-alone machine is going to be different than a machine in a kiosk, which in turn will be different from a machine destined for deployment in the institutional building itself, he said. All those affect the price. Additionally, most ATM manufacturers provide what the industry calls Tier II servicing for their machines, Hanisch said. This represents the sort of serious maintenance issues that overtake an ATM. The credit union itself, or an outside contractor, is responsible for the Tier I service of their own machines. Tier I servicing includes routine maintenance and replacement of small parts etc. The distinction between what a manufacturer will service and what the credit union will service is also often negotiable, he noted. Hanisch's point about diversity of credit union ATM needs and purchases is born out by one prominent credit union ATM deployer. The $71 million Actors Federal Credit Union, headquartered in New York, has spread 103 ATMs across New York City. The majority of these machines are the most basic ATMs, and the CU has deployed them in McDonald's restaurants. They only dispense cash and don't accept deposits and most stand alone. That's in contrast to the needs of other credit unions that want ATMs to be more full-service, where the ATMs have to take deposits, and allow members to make transfers between accounts. These types of ATMs may be seen in drive-through islands. Tom Conroy, an NCR vice president who oversees sales efforts to credit unions and community banks, echoed a lot of Hanisch's comments, but stressed the importance of a credit union having both a short-term and long-term business plan for its ATM deployments. "When it comes to ATMs not only do credit unions have different needs," he said, "but individual locations are going to be different – and are likely to change over time." NCR claims to have been the global leader in ATM sales for 16 years, but is involved in a close race with Diebold for first place in the United States, Conroy acknowledged. Tiffini Bloniarz, spokeswoman for Diebold, agreed that the race was neck and neck, but said that among credit unions Diebold was definitely ahead. "Credit unions are not the largest group we sell to, but are a very big portion of our market," Bloniarz said. Conroy wouldn't quote prices of machines, but noted that the decreasing price of low-end machines could be measured in the decreasing number of transactions that a given site would have to have to support an ATM. "A few years ago the industry standard was 1,000 transactions per month to support an ATM," Conroy said. "But now we have basic machines which are only dedicated to dispensing cash to the street that could go as low as 300 transactions per month and still be profitable." But Bloniarz would place a price on the basic machines and agreed with Hanisch's estimate of $20,000, though she also agreed with Conroy that lower prices on machines had cut the number of transactions needed to support them. Both Conroy and Bloniarz stressed the ability to upgrade their machines as something many credit unions overlook when they make their ATM purchases. As traffic at different ATM sites changes, as the members being served there change, a credit union might want an ATM to offer a service that it had not before, he said. The point? The machines need to be upgradeable. Conroy claimed NCR had the "most upgradeable" line of machines available while Bloniarz said that "modularity" had been a hallmark of Diebold machines, particularly the IX line of ATMs for years. There are also a wide variety of options available in how credit unions buy their ATMs. NCR will sell a credit union an ATM directly, through its own sales force, or through a retailer licensed to sell to credit unions. In some cases a credit union can itself become a reseller of NCR machines, Conroy said. Diebold, by contrast, doesn't use resellers and sells all of its machines itself, Bloniarz said. [email protected]