ATMs – an industry where some suppliers lack ethics

It was 2005 when I wrote my first article about the traps in ATM agreements. Sitting here in 2020, after some 15 subsequent articles on this topic and many discussions with suppliers and the ACCC, the messages of those articles are still relevant today with venues continually caught with detrimental ATM contracts.

“ATM suppliers have been far from ethical or honest in their dealings”

Venues are wearing the consequences of ATM suppliers who seemed so decent when they came into the venue and assured the venues that they would look after them, but have been far from ethical or honest in their dealings.

Five things to look for when sourcing new ATMs

Due to the changing technology landscape, I have urged clubs not to sign an ATM agreement for any more than three years. Within this period, the supplier has priced the deal so that the ATM is paid for in full, so extending with old equipment is beneficial only to the supplier. At the end of the agreement, do not re-sign with the existing ATM, insist on a brand new machine.

Furthermore, venues are still signing contracts, in haste, and without fully investigating the consequences of the fine print. As written in many articles on ATM agreements alone, you should consider the below when negotiating a new ATM deal for your club:

1. Use the industry ATM Placement Agreement and confirm that what you are presented with, is the actual agreement. Note that the ATM Placement agreement can’t be amended and any changes must be as per a separate addendum
2. Undertake due diligence on the supplier you are signing with. Ask them for say, 50 industry reference sites, and you chose random sites to call for references (not the two or three I have seen that are paid reference sites)
3. Ensure 24/7 service capabilities. The size of the ATM supplier and their service capabilities are increasingly important. Look for ATM suppliers with 24/7 service desks and guaranteed service timelines and personnel
4. Ensure you get the latest features and technology. Sign with a solid ATM supplier company who has the resources and technology to keep your ATM and technology up to date
5. Read the fine print in the terms and conditions, including:

• The age (and hence technology) of the ATM itself (as mentioned above)
• The number of transactions specific to your club
• Who cashes the ATM and associated fees
• The surcharge you charge your patrons
• Any security and other fees that the ATM supplier charges
• Service availability
• The rebate the club will receive (after any minimum number of transactions)

“Never sign an agreement for more than three years and always insist on getting a brand new machine”

CASE STUDIES

1. Make sure the machine is indeed brand new

   It seems to be the new norm to hear of ATM suppliers quoting for new equipment, but second-hand machines are in the box.

   Please clarify in writing that the machine is BRAND NEW (not new to your premises as one supplier has been seen to argue). Also, check that it is not repackaged when it arrives.

2. Request that your supplier keep their software up to date

   Under no circumstances should your ATM screen show options of Savings, Cheque or Credit (even if the credit option is disabled).

   This is a sign that the software or equipment is not up to date.

   It reinforces that you should use suppliers who have the financial and technology resources to keep up to date, with what is increasingly changing technology.

3. Choose a supplier that offers ‘must have’ features

   The ability to pay the ATM surcharge using membership/ loyalty points is increasing in popularity. With new features being introduced all the time, please use a supplier that offers the latest technology most important to you.

   As for the pay by points technology, only two suppliers, as at date of writing, offer this technology. There is a fee to set up this service, and a fee/transaction (in terms of a reduction in your rebate for the transaction). Any promises that others can do it for free or that this service offered by these suppliers is illegal, is NOT fact.

4. Don’t commit to another long-term agreement for the existing ATM in your venue

   In other cases, venues I have assisted in the past, in exiting detrimental five plus year agreements, signed new agreements for three years and those contracts are now expiring. Do not sign another three-year agreement – I certainly did not get you out of a five-year agreement so that you effectively entered a six-year agreement.

Steps you should take right now

There are two immediate next steps I would urge you to take right now:

• Review your current ATM agreement (or get it reviewed by me). Make sure you are aware of the termination date and what obligations your supplier has with respect to technology uplifts and software updates
• Give written notice under your existing agreement so that your contract does not automatically extend for another term

If the end of your term is coming up? Always take the time, practice good governance, and go back to tender and do your due diligence.

Feel free to call us or email your issue/contracts for a confidential review.

Phone: 02 8019 7266
Email: admin@clubswithoutborders.com.au