More ATMs for Absa

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 14 Jun 2007

Absa is rolling out a new generation of secure automated teller machines (ATMs) in previously-disadvantaged areas.

The deal is worth at least R20 million, says the bank and its vendor, Bytes Specialised Solutions (BSS).

It costs about R200 000 to buy and install an ATM.

The roll-out will see the bank grow its ATM footprint from 7 000 to 8 000 over the next three years.

Absa Group self-service channel GM Allen Mahadeo says there are about 13 000 ATMs in service in SA and between 2 000 and 3 000 more on the remainder of the continent.

Mahadeo says phase one of the BSS deal will see the vendor install about 375 greenfield ATMs a year, in retail and at fuel outlets, in previously underserviced areas.

This model turns the off-premises ATM into an annuity income stream for the franchisee. It gives customers the benefit of convenient and safer access to banking services, further promoting the convergence of services between the financial and retail industries.

Another thousand could follow under a second phase. Mahadeo sees the market saturating at about 17 000 to 18 000 machines, based on comparisons with peer markets and calculations based on the number of machines required per population.

"The number also depends on what the other banks do," he adds, saying that, in the last few years, 65% to 70% of new ATM infrastructure has gone into townships.

BSS outsourcing

Mahadeo says BSS will supply the ATMs, the accompanying technology and manage post-implementation service delivery.

Derick Deyzel, BSS ATM annuity divisional executive, says his company already maintains about 90% of Absa's ATM "fleet", at an average availability of 97%.

The ATMs will all be National Cash Register (NCR) devices. NCR is a prominent global player in the advanced ATM technology space and BSS is its exclusive representative in southern Africa.

Absa group executive director Venete Klein explains the choice by saying the bank is particularly impressed with NCR's ability "to protect the ATM hardware, software, cash and end-user". This is particularly important in a country "where ATM security is an ongoing concern". NCR machines "also stand up to the harsh environmental conditions that prevail in some parts of our country", she says.

Deyzel says Klein was in particular referring to the durability of the ATM's safe, which he rates as "much better than that of competitors", particularly in light of an ongoing spate of criminal attacks on ATMs using commercial explosives stolen from mines.

Deyzel adds Bytes has also invested with Absa in the remote management of ATM hardware and software, thereby cutting costs. "It is a success factor in uptime and availability."