The focus on enhancing payment security and combating fraudulent activities will help the automated teller machine (ATM) market tide over the challenging economic conditions and even help it post modest growth rates over the next two to three years in most market segments. Currently, the key industry client (banks, credit unions, and other financial institutions) are working under considerable financial duress and are reluctant to make capital-intensive purchases such as ATMs and physical security products. The emphasis on EuroPay, MasterCard, Visa (EMV) and triple data encryption standard (3-DES) security standards is compelling companies to upgrade their ATMs.
New analysis from Frost & Sullivan (kiosks.frost.com), World Automated Teller Machines Market, finds that the market earned revenues of $4.3 billion in 2009 and estimates this to exceed $4.9 billion in 2015.
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"The card associations (Visa and MasterCard) are spearheading efforts to enhance ATM and electronic payment security by mandating the switch to EMV-compliant cards and machines," says Frost & Sullivan Industry Analyst Aravindh Vanchesan. "The switch to EMV and 3-DES standards has already increased ATM sales in Europe, Asia Pacific, and Latin America, where fraudulence is rampant."
Backed by their respective governments, several countries including the United Kingdom, France, Brazil, Malaysia, and Thailand have initiated national campaigns to upgrade their payment infrastructures with EMV-compliant ATMs. Even Central and Eastern Europe, China, Russia, India, and other major economies where installed base numbers are low and card use is on the rise have evinced keen interest in installing new, secure ATMs, despite the current economic climate.
Nevertheless, decline and delays in investments have compelled ATM vendors and independent sales organizations (ISOs) to re-calibrate their business strategies to match the lowered demand levels. While the U.S. market is the worst hit, banks all over the world are postponing or abandoning investments in IT technologies until the economic climate is more conducive.
With the U.S. and the western European markets reaching maturity, vendors should target emerging markets such as Asia Pacific and Latin America to increase revenues and remain profitable.
Vendors should also focus on manufacturing ATMs locally to maximize customer service, address cost concerns, and gain a superior understanding of the local market dynamics. The major vendors should continue to invest in additional sales, marketing, and R&D resources targeted toward these regions.
The market has benefited greatly from the convergence and integration of the various technologies and service platforms offered by financial institutions. ATMs have to work seamlessly with other technology tools such as kiosks, mobile phones, broadband, and online banking.
"Even as customers expect more personalized interaction with their banks, various service and marketing channels must be integrated and send the same message to customers to be effective," notes Vanchesan. "This multi-channel approach can go a long way in enhancing customer service at the ATM."
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World Automated Teller Machines Market / N73F