This year is the 40th anniversary of the ATM. The first cash machine was unveiled on June 27, 1967 by actor Reg Varney, of On The Buses fame, at a branch of Barclays in Enfield, Middlesex. By last year, according to the payments association, APACS, there were 60,468 ATMs sited across the UK and the total value of withdrawals from those machines was £180bn - an average of £5,702 per second. At present these ATMs provide us with 65% of the cash we need, however APACS expects that figure to rise to 81% by 2016.

According to APACS, ATMs owned by banks and building societies account for the bulk of transactions - 95% by cash value and 94% by volume.

Alliance & Leicester (A&L) has 2,500 active ATMs throughout the UK; 10% of which are on forecourts.

Simon Brady, national sales manager for ATMs at A&L, says these take the form of pods with ballistic shields around them or through-the- wall machines. He explains: "Having a small standalone machine is fine but its use is restricted to the opening hours of the petrol station. If it’s a 24-hour site that’s okay but if not, it’s not available all the time. The through-the-wall ATM is more obvious, more in your face, and it generates more people going into the shop. We’ve found that four or five times as many people use a through-the-wall machine compared with a pod."

Brady admits that it’s difficult to know how much money withdrawn from an ATM is then spent in the shop but he says the consensus is 20%. He continues: "The benefit there is that the spend in the shop has paid for that ATM transaction. It also drives footfall and becomes a defensive strategy because if you don’t have an ATM, customers will go somewhere else, withdraw their money and spend their 20% somewhere else."

Brady recognises that security is a big issue with cash machines: "These are expensive machines," he says, "With a significant amount of cash in them - tens of thousands of pounds at any one time - and a lot of the time that is our money. So when our people go out to see a prospective site, they first have to establish that it’s a secure environment. They review the premises and see whether there have been any break-ins recently. They look at where the ATM will go and assess things like how many bars will need to be put in front of it. We also put in an alarm to ensure security is as robust as possible. You can’t simply put in an ATM on its own because you have to think about things like ram raids, which cause collateral damage and can take out an entire shop."

He says A&L provides forecourt operators with everything they need to get an ATM. "For through-the-wall machines you need planning permission. We provide all the back-up - the plans, the drawings and help with the application. We can’t actually apply for permission, the retailer has to apply in his name but we do all the work. I haven’t yet come across an application that’s failed. We have a lot of ex-police people working for us and that helps plus the fact that the application is coming with the backing of a well-established company."

Once the ATM is in place, the forecourt operator has to let his or her customers know it’s there. A&L supports its forecourts with point of sale material and sometimes with advertising.

== Charging ahead ==

One of the big issues in the ATM industry is about charging customers to get at their cash.

Ron Delnevo, managing director of independent ATM provider Bank Machine, believes there’s been a lot of hype about charging, aimed at putting people off using machines. "We provide charging and free ATMs to forecourts; the decision about which way to go is decided in discussions. We go through the various pros and cons of each type of operation and we discuss things such as whether the operator is facing a lot of competition."

Approximately half of A&L’s forecourt ATMs are free to use. Says Brady: "If the footfall at the site is high enough, a cash machine is viable without the need to charge customers. In addition, A&L cardholders are never charged at one of our ATMs, whether it is a surcharge machine or not."

Brady admits that charging does have an effect on usage: "The rule of thumb is that five times as many people use a free machine as opposed to a charging machine.

"We’ve recently taken over the ATMs at Alton Towers. There they had a bank of three machines - two were free and one charged. The charging one, surprisingly, did get some business but just 10% of what the other ones got."

Operators with ATMs that charge for withdrawals are often quoted as saying that hardly anybody ever cancels the transaction when they realise they are about to be charged. But Brady says: "They may not cancel at the time, because they need the cash, but they won’t use that machine again.

"There is a preference to move to a free ATM environment but the terms under which they are offered have to be commercial. If you go for a lower cost base with lower cost machines then security can become a challenge and we invest in security for our retailers."

Retailers are paid by A&L for having the ATM, depending on volume of transactions so it is an income source and a footfall driver. Charges to customers are based on transaction levels; £1.75 is the standard fee.

A&L does let customers self-fill machines, which obviously reduces their bank charges. However Brady says some outlets don’t have enough cash to keep up with demand.

A&L is looking to expand its ATM network and Brady says forecourts will be part of that expansion.

Meanwhile, APACS says the number of ATMs supplied by independent companies ie non-bank or building societies, grew by 19% to reach 25,767 machines by the end of 2006.

Delnevo says Bank Machine was the first independent ATM operator in the UK in 1998 and today is still totally focused on ATMs. "This means we can give our customers the best possible experience because we have no other distractions. Our machines are therefore in working order for the highest percentage of time."

He says his company has a great relationship with the forecourt industry, thanks to the 100-plus ATMs he has at petrol stations.

The George Hammond Group recently had a through-the-wall ATM installed by Bank Machine at its recently-developed Spar site at Burwash, Sussex. Managing director Brian Madderson says he was impressed with Bank Machine: "I was particularly impressed with their recommendations on security which led to them installing anti ram-raid bollards free of charge. These protect our shop as a whole, not just the ATM."



The payments industry is working with the Local Government Association (LGA) to try to reduce ATM crime at grass roots level. One solution currently being implemented is the use of privacy spaces for on-street cash machines.

These spaces comprise a zoned area marked on the ground in front of the cash machine to enable users to enter their PIN in private. A trial by the Greater Manchester Police found that privacy spaces reduced offences connected to a cash machine (within 150m of the ATM) by 66%.


=== CASH FACTS ===

l The total number of cash machine withdrawals has grown from 1.6 billion in 1996 to 2.8 billion in 2006, with the amount of cash dispensed more than doubling from £80bn to £180bn.

l In 2006, UK consumers spent £274.3bn in cash.

l Older people are now more used to using ATMS - in 2006, for the first time, more than half of over-65s were regular users of cash machines.

l The average number of cash withdrawals per day at each bank- or building society-owned machine was 213. There were, on average only 18 withdrawals per day at each ATM owned by an independent operator.

l 95.5% of withdrawals are from free ATMs.

l The average cash withdrawal value from a bank or building society ATM was £65 and only £48 at independently-operated machines.

Source: APACS