it has been a couple of years since i worked on a national atm...

it has been a couple of years since i worked on a national atm project so im a little rusty. but this is how i see it.

the value chain (i cant remember the exact numbers that go to each part)

1.Merchant
2.ATM Owner-operator
3.Card Issuer (Bank)
4.Switch (Usually a bank, but can also be SPS or First Data but is at the discretion of the operator as to who switches their transactions for them)
5.Acquire and settlement(Bank)


This will still be the value chain. Each of them will still receive their cut of the transaction fee.

the devious nature of the current regime is that the banks control the pricing of an atm transaction. effectively outsourcing the deployment of machines to reach their customers for a fixed fee to the atm owner-operator. at the backend, they determine how to charge foreign atm fees.

by providing free transactions to high value customers and chargin lower value customers, they were distorting the market and also fixing the revenue available to atm owners. thus limiting the potential to reach remote locations. complete rort from day one, which is why the rba doesnt like these sorts of set-ups and has been knocking over one by one, starting with the credit cards and their rewards programs a few years back.

what direct charging does is flip the revenue collection and pricing discretion to the operator of the atm network. but the banks arent going to provide their customer base access to a foreign network of atms without obtaining a fee from the operator for being part of that value chain. they will continue to get their acquiring fees. i havent read the rba legislation on this so im not sure if it is a regulated price or left to the parties to agree.

so from all of the above, it should be assumed that the value chain remains intact and that no party will continue being a part of that value chain for less money per transaction. why would the banks agree to that when they dont have to? of course they wouldnt. to me its just logical.

so you have to ask, where will the money come from? imo, it will come from the ability to excercise pricing discretion over and above the 2 bucks typically charged for a foreign atm transaction by a bank. DC will help cashflow as CUS will be in receipt of the money first, but i dont think it will drive NPAT. that isnt where the main benefit will come from. and you will notice CUS has not mentioned this in any of their comms to date (well i havent noticed anyhow).

make no mistake, your ceo is a very well respected operator.
he knows the game.