(October 15, 2007) Better ATM Services Inc. today took another step toward realizing its goal of turning ATMs into machines that can dispense something other than cash. The Mesa, Ariz.-based startup certified machines made by Diebold Inc. as capable of dispensing its prepaid cards, which Better ATM Services is testing at five restaurants in the Phoenix area.

“This is the first of a series of announcements that we’ll be making regarding the implementation of the enablement of technology and equipment,” says Thomas E. Honey, chief development and marketing officer at Better ATM Services.

The privately held company last month disclosed its test of dispensing gift cards, coupons, and instructions for using them out of the same slots through which cash is dispensed at Diebold model 1064i or 1064ix machines in the restaurants (Digital Transactions News, Sept. 19). The certification covers all of Diebold’s ix, iSeries and Opteva ATMs.

Better ATM Services also expects to certify machines from other prominent ATM makers, including market leader NCR Corp., according to Honey. It also has brought on another ATM driver, which Honey won’t identify, to supplement its previously announced driver, Minneapolis-based U.S. Bancorp’s Elan Financial Services.

Assuming consumers embrace their offerings, companies such as Better ATM Services could prove to be a blessing for manufacturers in the mature North American ATM market. “Clearly the transaction volumes on ATMs in the U.S. market are not accelerating,” Ken Justice, vice president of global product marketing and management at North Canton, Ohio-based Diebold, tells Digital Transactions News. “People are still using them to get cash, but you don’t see double-digit growth. What this provides is a new set of transactions to provide incremental growth to that channel.”

According to Honey, the Phoenix machines are doing about four prepaid-card transactions daily, one more on average than the restaurants were selling over the counter before the test. “They’re going about as planned,” he says.

One of Better ATM Services’ sales pitches to merchants, ATM independent sales organizations, and manufacturers is that outfitting machines to use its service is easy. In the Diebold machines, the prepaid cards are placed in one of up to four trays in a dispenser module normally used for cash. The machines didn’t need any physical modifications, according to the two companies.