Question

Topic: Strategy

Revenue Enhancement Ideas For Whitelabel Atm's

Posted by vasudev_kamath on 1/25/2014 at 9:05 AM ET 25 Points
We are looking revenue enhancement ideas & Startegy for our company's newly launched India’s first White-label ATMs (WLA) in 2013, under the brand-name, Indicash. These ATMs(Automated Teller machine), like any other bank-owned ATMs, allow customers to withdraw cash from any bank’s ATM debit card without paying any extra charges (subject to any limits that their bank may have imposed). Indicash ATMs are being rolled out in several states of India, with a mix of urban, semi-urban and rural locations – with greater preference to the latter two categories.(semi-urban and rural locations).

Indicash ATM locations are chosen based on a variety of factors including high traffic / movement of people, likelihood of commercial activities and absence of other ATMs in the neighborhood. It has been observed that locations like bus and train stations, colleges, shopping destinations etc. have a higher chance of transactions. Indicash has a mix of both independent rooms (like most ATMs that we observe in India) as well as a ‘shop-in-shop” where an ATM is located within a larger shop or a building complex.

The primary revenue model for Indicash is fees that it earns from the banks on a per-transaction basis. Therefore, increasing footfalls and transactions at the ATMs is a primary goal.

In addition to cash withdrawal transactions, Indicash could consider other revenue enhancement opportunities. RBI (Reserve Bank of India) guidelines permit advertising and marketing activities to be undertaken at the WLA locations. Indicsh can partner with the other group companies or other companies to leverage its reach and traffic.

To give a sense of its reach, consider the following:

An Indian ATM has about 100-150 transactions a day; even at 100 transactions daily at 15,000 ATMs, Indicash ATMs would attract 1.5million visitors every day and potentially about 15 million unique visitors every month by 2016.

Can you suggest some revenue enhancement ideas that Indicash can adopt which:

a) Increase footfalls and transactions at its ATM locations:

b) Add new sources of revenue beyond a cash withdrawal service? In particular, which the group company priparily in Telecom business products and services would lend themselves to be sold either through the ATM machine or in the ATM room – especially. in Tier 3-6 locations (with a population of less than 50,000)?
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RESPONSES

  • Posted by Moriarty on 1/26/2014 at 3:27 AM Member
    I would like to ask you if you could check the times of day that your ATMs are used at certain places. Because one of your problems is that cash can buy anything. The amounts and timings will give you a pretty good idea why they want the money.

    Knowing that will give you the key to the message you need to present them.
  • Posted by vasudev_kamath on 1/26/2014 at 4:11 AM Author
    Thanks Moriarty, for your suggestions your suggested solution is already being analysed by our Project Management team and analyst as we get a time stamping on each transaction the customer does. However we want to know what could be the reasons for a customer to not come to a white label ATM or rather how can we increase the footfalls and change the mindsets of the Indian Semi urban and rural customers to not just visit their own bank atms but go to any other white label ATM's to withdraw cash for their daily needs. To cite an example : If you had an a/c with say Citibank - The indian customer goes hunting for an Citibank ATM, on a pay/salary day, there is a huge line/queue outside these ATM's to withdraw cash increasing the wait time, we have set up white label ATM's to ease the situation keeping these factors in mind at prominent locations yet the customers refrain from visiting any other bank ATM's even though there are no transaction fees for 1st 3-5 transactions. Probably thinking it is a different bank all together. This is not the case in URBAN/Metro cities.
  • Posted by Moriarty on 1/26/2014 at 7:06 AM Accepted
    Thanks. What I am trying to uncover is what value people are putting on being able to get their money quickly. Perhaps something like your mobile device - have a coffee stall next to your ATM :-)

    Perhaps you could have a slogan like "ANYBANK" or somesuch indicating that they can use yours as well - for the same costs. (Or not??).

  • Posted by vasudev_kamath on 1/27/2014 at 2:10 AM Author
    Thanks Moriarty,

    Our Current text on ATM Boxes states " ANY BANK CARDS Accepted ". DO you think this text is misleading for the the Indian Semi urban and rural customers.

    Liked the idea of coffee stall :-) Sounds like an excellent idea !! something that's workable for Indian Semi urban and rural customers

    Regards,
  • Posted by Moriarty on 1/27/2014 at 3:02 AM Member
    Ah! What I'm seeing in your customer is one doubt: how much will it cost me? They say, "Yes, it's great, it's a good service, but my bank charges me so much - how much does this charge me?"

    In other words "Any Card, Same Charges"

    "All Cards, Same Charges"
    "Any Bank, Same Charges"

    How can you say "the usual fees apply"? This is where Saul Dobney comes in handy because he adds some perspective to the names and taglines.

    How about "You don't pay anything extra to use this service" Perhaps you can write it on the side of your coffee cups ;-)

    What are your thoughts on this?
  • Posted by saul.dobney on 1/27/2014 at 5:06 AM Member
    The reason people don't use white label ATMs is because of the perceived extra charges and higher transaction fees. The counter point to this is placing the ATMs in sites that normal banks can't or won't go and so winning on convenience. In Europe, as you've mentioned, we see ATMs in convenience stores and all-day supermarkets for instance, or in stations and airports on the other side of the ticket barriers (where there's no competition), or in areas popular with tourists where they don't know the local banks.

    For advertising consider a second screen above the ATM to reach passers-by, not just ATM users. I'm assuming mobile phone top-up is part of the offer. You could add couponing print-outs as I'd assume that you're in or near stores. In Spain, they have bill payment via a bar-code reader on the ATM that takes a reference from the bill.
  • Posted by vasudev_kamath on 1/27/2014 at 7:16 AM Author
    Thanks Moriarty for the direaction yes we have provided customers with the charges inside the ATM cabin that their 1st 3 transaction in a month is free post that they would be charged.

    Saul.dobney - could you please elaborate on this option of add couponing print-outs i think this is worth exploring. How can this be done.
  • Posted by saul.dobney on 1/27/2014 at 7:48 AM Accepted
    When the receipt is being printed, an extra piece of paper with a coupon (eg for local shops) could be printed with a barcode. Scan and redeem.
  • Posted by vasudev_kamath on 1/27/2014 at 8:12 AM Author
    ok got it !! cool that sounds great !!
  • Posted by vasudev_kamath on 1/29/2014 at 5:21 AM Author
    Hi team,

    Any other suggestions other than those listed by saul.dobney and Moriarty

    Regards,
  • Posted by Moriarty on 1/29/2014 at 9:52 AM Member
    What a fantastic idea from Saul!! (You didn't see me steal it, did you, Saul?)

    It's brilliant because you have to use the system to get the coupon. The other possibility is a prize draw - say on Facebook/your website where they have to go to your page and enter the coupon code. Every coupon has something of value which means it's always worth a visit - but you can also have some sensibly hefty prizes. Say one $1000 per month (or whatever sum is sensible and substantial).

    The only problem with the coupon printout is that they have to use the thing first - hence the coffee stall to get things rolling in the first phase. Once there's a small queue every week, others will gather - and get their coupons. You should be able to corner some of the market even if you're more expensive this way (it becomes a kind of lottery for them?) - the only downside is when you're copied.

    Well of course, that's when you come back here ... but when it comes to a USP (Rosser Reeves' Unique Selling Propostion) these are always being knocked off by dopey competitors. So I always make sure there are at least two that the business can use - and as soon as someone copies it, they wheel out their new one! The only thing I don't like about doing this is that I never get to see the competitions' faces when it happens.

    What do you think?
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