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South African ATM expert hails directive of off-site ATMs

By Babajide Komolafe
Managing Director of Spark ATM System, the second largest off-site ATM management company in South Africa, Mr. Mark Sternberg has said that the CBN’s directive on Off-site ATMs will  boost to business model of Independent ATM Deployers (IAD) in Africa.

It would be recalled that the apex bank last year directed that  only Independent ATM Deployers (IADs) can  install and manage off-banking sites ATM networks in Nigeria and hence directed banks to redeploy their off-site ATMs
Sternberg, whose company deployed and manage the second largest off-banking site ATM network in South Africa with installed capacity of over 1,000 cash machines, said  at the just concluded AITEC Banking & Mobile Money Conference in Nairobi, Kenya. “I have been watching the situation in Nigeria very closely. It is the best boost to the business of ISO and IAD in Africa. I really commend the regulatory authority, CBN, for this boldness.”

It would be recalled that Nigeria’s premier IAD and operator of the QuickCash ATM network, ATM-C recently announced that three banks have handed over 1,000 ATMs to its network. The cash machines belong to UBA Group, First Bank and Diamond Bank. The two other licensed IADs, Chams Access and Coporeti Support Service (CSS), have not announced handover of cash machines by banks.

These banks’ decision to handover the ATMs to ATM-C complies with the CBN’s directives on deployment of off-banking site ATMs, which requires that all banks should either handover their cash machines, deployed outside the bank locations, to  consortia or relocate them to their premises on or before March 31, 2001.

With this development, ATM-C already controls 42% of the off-site ATM installed capacity in the country. Nigeria has 8,902 installed ATM capacities, out of which 3,485 are located

outside the bank premises. Some of the banks that are yet to handover their cash machines
are Zenith Bank: 170, Stanbic IBTC: 43, Skye Bank: 340, Oceanic Bank: 140, Intercontinental bank: 659, GTBank: 72, Ecobank: 21, BankPHB: 60 and Access Bank: 130.

Sternberg said SparkATM is ready to provide both infrastructure and technical assistance to IADs in Nigeria, noting that experience has shown that consumers prefer ATMs to access cash 8 to 1 over any other method. He, however, advised the IADs not to ignore in-stores and rural areas when growing their networks. “Extend your reach into rural parts of the country and offer your business customers an in-store ATM to help the business grow.”

He also identified wrong cash replenishment model as one of the factors that makes off-site ATM network management un-profitable in most African countries. He specifically advised IADs to settle for merchant-filled cash replenishment model, arguing that the Cash-In-Transit (CIT) replenishment model commonly adopted by most IADs is not cost effective. “It requires establishment of CIT firm, accurate cash forecasting, high transaction volume and first line maintenance only done by ATM custodian who leads to longer downtime.”

According to him, the merchant-filled model is becoming very popular because it significantly lowers the cost of operation. It is also an effective way for host merchant to bank his cash, as it requires little cash forecasting and first line maintenance done by the merchant, thus increasing uptime whilst lowering the break-even no of transactions needed for each ATM.

Members of staff of First City Monument Bank Plc (FCMB) and its subsidiaries yesterday took a humanitarian initiative to donate towards alleviating the sufferings of the victims of the  Jos ethno religious and Haiti earthquake.

The donation which coincided with the inauguration of the Nigeria Red Cross Fund Raising Committee for the victims of the Haiti Earthquake and the Jos Crisis in Abuja on Thursday (March 4, 2010), was highly commended by the cream of dignitaries that graced the occasion including the Chairman of the fund raising committee and Former Head of State, Gen. Abdusalam Abubakar and the President Nigeria Red Cross Services (NRCS), Rochas Okorocha.

FCMB’s Head of Corporate Communication, Tunde Shofowora said “the drive to support the victims of Jos ethno-religious crisis and Haiti earthquake was voluntarily initiated and implemented by the bank’s staff from their own pockets during the months of January and February, with the intention of remitting the funds through the Nigeria Red Cross.”

While receiving the donation, Chairman of the fund raising committee and Former Head of State, Gen. Abdusalam Abubakar, thanked FCMB for the initiative and identifying with the need to help alleviate the suffering of Jos and Haiti. He enjoined other corporate bodies to emulate the good gestures of the FCMB staff.


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