This post by Todd Nuttall, CEO of Better ATM Services, first appeared on www.atmmarketplace.com.
People queued up outside Cyprus banks and withdrew all the cash they could — until the machines were empty. Bank accounts were no longer sacrosanct as hard-earned funds were tapped to bail out a downwardly spiraling economy.
Now that we’ve had time to digest what has happened, what does it mean to us in the U.S. — halfway around the world? Clearly, I’m not suggesting that the Cyprus scenario will happen here, but there are lessons to be learned.
Over the years, I’ve read a great deal about money supply and related policies, but what we’re witnessing today is rewriting the books. Like you, I am watchful of the fallout as financial uncertainties continue to roil what had been the global norm, and nations swing at failing economies like a twisted version of the “Whac-A-Mole” game at Chuck E. Cheese’s.
Executives in the ATM industry are not alone in viewing recovery with a jaundiced eye, because recovery remains elusive for many. In fact, many financial industry prognosticators believe that the next few years will be defined by the price we will all pay for decisions regarding the monetary supply.
A significant number of conversations focus on inflation. Many ask what now? Do I make money or lose money when inflation rears its ugly head and the velocity of cash is so high that, at its extreme, it can empty machines?
I believe the ATM industry is well positioned to seize profit-making opportunities from this turmoil. We know that ATMs were designed around the convenience model — “Let me get the small amount of cash I need when I need it and where I need it.”
They were not designed for panic situations such as the one seen in Cyprus. As the value of currency fluctuates and financial behaviors of average people are modified over the mid-to-long term, how does that change my business model?
Look closer and you will see that evolving global economies are creating chasms of new opportunities for those with some foresight and creativity. Because we are seeing a shift in how people view banks and how people hold and manage their funds, I strongly believe this is the time to look at the implications of non-cash products from the ATM.
Prepaid cards are already being used as a financial tool by an ever-widening demographic and I’m not just thinking of the unbanked or underbanked and how those groups have traditionally been defined.
For ATM owners and everyone who has a place in the related revenue stream, there is ample profit to consider and a burgeoning future. New revenue streams from existing locations and equipment will help prepare business to face looming market and economic changes. Who doesn’t want a piece of the more than $549 Billion loaded onto prepaid cards in 2012?
I don’t think any of us have ever had so many unknowns in our decision-making. Our industry’s daily challenge now includes global scenarios that require us to become more discerning, creative, and nimble as we face the new realities of an uncertain financial foundation — and its redefining effect on global economies.