Are financial institutions missing a big opportunity by failing to offer prepaid cards at ATMS?
According to a new study commissioned by Better ATM Services, that could be the case.
Despite the widespread prevalence of both ATMs and prepaid services both in the U.S. and abroad, the two are rarely used in conjunction. Both platforms are largely used for their convenience, yet the two have not yet truly merged.
PYMNTS.com spoke to Todd Nuttall, CEO of Better ATM Services, to learn why that’s the case, what surprised him most about the study and how prepaid and ATMs are going to converge in the future.
“There’s a tremendous amount of data out there about people using ATMs, but largely for cash or other simplified banking processes. And then there’s a lot of data about people using prepaid, either for gifting purposes or for budgeting, and we know about the less-served population and so on. So there’s a lot of data there, but very little correlates the two,” Nuttall pointed out. “Since we’re bridging these two industries, we needed to understand more about it.”
And what Nuttall and Better ATM Services learned from the study was that the crossover between those who use ATMs and prepaid services is huge. According to Nuttall, 70 percent of ATM users also buy prepaid products, yet almost none can purchase said products from ATMs. This is best highlighted by the credit union industry, where 56 percent of consumers purchase prepaid products, but only 5.6 percent do so directly form their credit unions.
In Nuttall’s estimation, this gives banks a way to gain revenue streams through a service, such as offering prepaid alternatives, rather than through yet another series of fees.
“As you look around the world, prepaid of all types are growing and ATMs are well established with over a couple of million in the world, an they’re known as the best self-service devices on the planet,” Nuttall said. “By bringing the two services together, we offer a wealth of opportunity to both the prepaid world and the ATM world.”
To hear more Nuttall on the convergence of the ATM and prepaid industries, listen to the full podcast below.
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Chief Executive Officer, Better ATM Services
Todd Nuttall brings more than 20 years of experience in domestic and international, finance, payments systems, technology innovation, business leadership, and business consulting to his position as Chief Executive Officer, Better ATM Services. He has leveraged his considerable expertise to lead innovation in the ATM and prepaid space with the introduction of ATM-dispensed gift cards and other prepaid media ushering in a new era of ATM functionality and profitability.
As Vice President of Financial and Strategic Services for American Express from 1999 to 2002, Mr. Nuttall led efforts to transform payment processing, financial reconciliation and reporting in India, the U.K., and North America. He also served as Vice President and CFO of American Express World-wide Data Operations which included oversight and reporting on technology spending approaching $1 billion annually.
Prior to 1996, Mr. Nuttall held technology leadership roles at Boeing Computer Systems, Ernst & Young LLP’s Phoenix-based Information Systems Assurance and Advisory Services, and Phelps Dodge Corporation.