The company died. I have no hand in its demise. In my earlier life, I consulted for a company called Automated Teller Machine Consortium [ATMC]. The company could not have survived. It shared the same women with its founders. ATMC was a special-purpose vehicle established by the banks to deploy off-site ATMs. The shareholders were: Diamond Bank. Fidelity Bank. First Bank. Afribank. UBA. Union Bank. Wema Bank. Zenith Bank. Accenture. Before its death, ATMC was the largest independent ATM deployer [IAD] in Nigeria.
The company aimed to deploy 2,000 shared ATMs in Nigeria. The machines carried the insignia Quickcash. Anywhere you found the Quickcash logo you would get cash. Quickcash was located in places without bank presence. Eateries. Fuel stations. Shopping malls. Restaurants etc. The initial rollout was smooth. Then the Quickcash brand died quickly. Why?
On the one hand
Could you hand over your off-site ATMs to ATMC? The CBN ordered. The first CEO of ATMC, Olumide Bajomo, and his team were happy. It appeared to Bajomo that the CBN’s order would quicken the rollout of more Quickcash machines. He was disappointed. The banks refused to hand over their machines. Bajomo exited. Why?
On the other hand
Noble Ekajeh, Bajomo’s successor, inherited the legacy system. Our discussions were on the same issue. It was obvious that the ATM consortium was not working. To confirm it, the CBN reversed its policy. Banks could deploy cash machines anywhere. Then the bank consolidation exercise sealed ATMC’s fate. The banks that were uncooperative earlier now had official backing. Adieu ATMC.
In the long term
Why did the banks refuse to hand over their machines? Does a bank profit from deploying an ATM? No. How do I know? A reason that led to ATMC’s demise was the high maintenance cost. To maintain a cash machine, you need a cash machine. You need cash. You need a machine to count the cash. You need a sorter to find ATM-fit banknotes. You must do this every day. Seven days a week. Four weeks a month. 365 days a year.
You need a cash-in-transit vehicle to ferry the cash to the designated machine. You need security personnel. You need electricity and a diesel power generator. You need a steady internet connection. You must pay rent. Add these hurdles to the uncooperative stance of the banks. ATMC enjoyed the ride. ATMC could not survive.
ATM sales and management guru, Tope Dare, the man who sold most of the ATMs in Nigeria, told me recently that a bank does not profit from deploying an ATM. Dare listed the following reasons: High cost of capital expenditure [CAPEX] on ATMs: High cost of maintenance. High cost of power infrastructure maintenance. Cash management. One of the leading bank CEOs said on one of the platforms I belong to: ‘’Banks do not make money from ATMs. I know this is hard to understand but it is true. It is not possible to make money from ATMs. It is uneconomical to serve the people using the ATMs’’.
In the short term
The banks earn revenue by charging non-customers fees for using their ATMs. In the ATM race, ATMC could not have survived.
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