Category Intelligence on ATM Services Australia covers the following
Intensity of Rivalry
Barriers to New Entrants
Threat of Substitutes
The major factor driving the industry is the competition among banks to provide service to customers' convenience
In developing markets, such as India, China, and Brazil, there has been a significant surge in opening new bank accounts. About 200 million plus new bank accounts were opened in India in the last three years
Creating presence around city is very important for banks to attract customers. It is not possible nor cost-efficient to set up branches around all the locations. Hence, the ATM industry is driven by this factor, as it does not require heavy real-estates nor other related costs
Low-cost ATMs by IADs:
Deployment of low-cost ATMs and cheaper IP-based communication by IADs push the initial investment costs down
Proliferation of Off-site ATMs:
Convenient location of ATMs ranks high among the needs of consumers and has propelled the growth of off-site ATMs
High operational and maintenance costs (CIT) in developed markets
–Including embedded cameras, GPS systems, as well as seismic and heat sensors, leading to additional cost for banks
Cost of new technology for updating ATMs has become a large issue in the market today. E.g., upgradation of operating systems from Windows XP to Windows 7 or 10 across all ATMs
With card skimming, there is a need for physical security and monitoring of ATMs
Wide Adoption of Cashless Transactions:
The proliferation of payment options other than cash, including credit cards, debit cards, stored-value cards, mobile payments, and online purchase activity, could result in reduced need for cash in the market place
According to the Australian ATM industry statistics, most adopted engagement model is the “Turnkey ATM Program”.
The service provider owns the ATM and performs all operational tasks, including cash management and loading, supply replacement, maintenance, customer care, and processing
These turnkey service providers are well established players in the market, providing integrated services to buyers and have proven experience in providing turnkey solutions
Turnkey suppliers do not offer the entire range of OEM models. They have certain models and those are offered as a part of bundled service. Mostly, ATMs are basic, low-cost models
ATM providers in Australia must ensure availability ratio of ATM at 98% for all services covered under the maintenance contract. For availability ratio lower than 98%, penalty points should be calculated and deductions should be made off the monthly maintenance fee/ATM x Number of ATMs impacted.
During contract negotiations, ATM providers in Australia may be concerned about uncontrollable expenses for a number of services, especially in hard services spend categories.
Sometimes, service providers ask for these spend areas to be exempted from maximum price controls.
Unfortunately, removing price controls may lead to higher risks for buyers, and lesser incentive for service providers to manage and deliver services efficiently
The ATM services contract is the first legal relationship with a new/existing service provider. A well-written contract is essential for maintaining a smooth relationship with a service provider and will also help the buyer in avoiding cost overruns.
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