Friday, April 19, 2013

The killer app of the new mobile, global economy!

At a time when our society seems close to abandoning further dependence upon cash, the latest book about the ATM industry argues to the contrary and in the process, draws a startling conclusion.

This week I was given a book to review. Cashbox – the invention and globalization of the ATM turned out to be a more interesting read than I had initially thought and although it could find a place on anyone’s coffee table, it contained enough substance to keep me reading well into the night.

The book was created as a cooperative effort between Tom Harper, a cofounder of the ATM Industry Association (ATMIA) and Bernardo Batiz-Lazo, Professor of Business History and Bank Management at Bangor University in Wales. It is on the AMIA web site where I frequently blog and whose annual event I attended only a few weeks ago. This richly illustrated book takes a good, long look at what has driven the success of the ATM, as well as which companies have contributed to the global proliferation of ATMs.

“Given the prediction by Retail Banking Research, Ltd (RBR) of three million ATMs by 2015, and the average number of monthly cash withdrawals per ATM in Western Europe between 1994 – 2015 as an industry benchmark, namely 2,877, we can forecast that by 2015 there could well be a total number of 8.6 billion cash withdrawals every month in the world,” the authors report. And for everyone in the NonStop community curious about future transaction volumes heading for NonStop systems, “this is a mind-boggling numbers.”

Perhaps every bit as interesting is that “the total number of ATM cash withdrawals is expected to increase at an average of eight percent per year between 2010 and 2016, compared to an average of six percent per year in the number of (ATM) installations.” So reports RBR, and it is a reflection that our interest in cash, even in today’s cashless society, is showing no signs of letting up.

It is no surprise to anyone who has been following NonStop for any length of time to see that, like cash itself, NonStop is showing no signs of letting up. With the recent introduction of Blades, HP NonStop Enterprise Division (NED) has been enjoying considerable customer acceptance and while HP does not breaking out financial information about the contribution of one division or group versus another, there is enough anecdotal information (gleaned from many public events and meetings) to suggest that much of the Blades acceptance has been fueled by a significant uptick in transaction volumes – particularly among companies within the financial services marketplace.

One of the shortcomings of the book is that there isn’t a chapter devoted to what I call the “server wars”. With the obvious need of ATMs to be available 24 X 7, it was of paramount (and indeed, of competitive) importance for systems in the center of ATM networks to stay up around the clock. However, how this was achieved isn’t covered, although, in the words of one NCR product manager, there was acknowledgement that NCR worked closely with developers of the ATM networks, such as ACI, SDM, Deluxe Data, and others. This disclosure, mind you, not appearing in the 100 page book until page 31.

comForte and Infrasoft owe much of their success to the success NonStop enjoyed within the financial services marketplace. Today, many of the ATM networking companies referenced above have merged with others or been acquired, as well as facing new competitors in a number of GEOs but emergence of multiple payment platform solutions with nearly all of them including support of NonStop systems is not lost on anyone who follows the industry. Choice has always been good for the NonStop community and it is this opportunity to choose that extends beyond solutions vendors to include middleware, infrastructure and tools vendors where comForte pursues business opportunities, and looking at just how big this marketplace is coming bodes well for comForte.

However, it is in the closing paragraphs of the book, Cashbox, where I find one of the more intriguing observations. “Here’s to the cash box,” the writers conclude, “ironically, the killer app of the new mobile, global economy.” Earlier in the book, there was commentary on how checks, introduced to minimize the need for cash (and hence, help foster its demise), may indeed disappear before their intended quarry (cash) disappears. In markets, such as Europe, where so much effort has been made to develop a cashless society, how could this be?

“To those prognosticators who see a dearth of dollars down the road, we say, ‘Don’t bet on it.’ Cash will continue to meet the demands of a world in need of security, anonymity and control,” is among the closing comments. However, it’s used as much for dramatic effect (one part of society that will hang on to cash much longer than others will be those on the fringe, gambling and chasing the sure thing) as it is pragmatic. “It protects privacy in an age when everything we do is tracked, including phone calls, e-mails, card purchases and mobile transactions. Yes, you can become a person of interest and yes, you are being watched!

Should you have an opportunity to read this book then I would strongly encourage you to do so, even if you are not a part of the financial services community. Among the many user references are many familiar names – Link and Barclays in the UK, CIBC in Canada, Wells Fargo and Bank of America in the US to name a few – all positioned as innovators who pushed the envelope considerably when it came to exploiting ATM features well ahead of what others eventually did. Rarely is a user mentioned who isn’t a NonStop user or, for that matter, indebted to the offerings developed by comForte.

I am often asked what my views are about the next killer app and in reality, I am no better informed than most of you. However, sometime the obvious is too quickly overlooked and dismissed and when it comes to cash, we all need to remember it is still the world’s only 100-percent trusted form of payment. Perhaps that really is the criteria for a killer app – global acceptance – and if true, the NonStop community has plenty to be pleased with. You can bet on that, too!

1 comment:

  1. It also obviates the necessity to walk into a bank or currency exchange to get local currency in your pocket and it does it quickly.