Spark ATM Systems, winner of the Management of Technology Award in the large enterprise category
It’s well known that repeat customers are more profitable than new customers, and that the costs of retaining an existing customer are significantly lower – up to five times, some studies say – than the costs of acquiring a new customer.
Which means that Spark ATM Systems is on to a very good thing.
Its business is to deploy, install, support and maintain ATM machines on behalf of banks, for which purpose it signs five-year contracts with host merchants such as retail outlets and petrol stations.
After five years, the host merchants can decide whether or they want to stick with Spark. By far the majority of them do, according to Russell Berman, Chief Sales and Marketing Officer.
“We’ve got something like a 92% renewal rate, which is a statistic that we’re very proud of,” he says. “I always say to my team that it’s free business because you’ve got them to come back for a second and in some cases a third term.”
Russell says this enviable renewal rate is driven by dedicated customer service and the top-notch systems in place at Spark, the wholly owned South African subsidiary of US-based Cardtronics, the world’s largest ATM operator.
So what does Spark, which has over 4 500 ATMs across South Africa, do so well when it comes to managing technology?
“We’ve always had a policy of developing our systems in-house rather than buying software off the shelf,” he says. This includes the operating platform on the ATM, which Spark developed in conjunction with its South Korean machine manufacturers, the data monitoring platforms and its own switch.
“Ordinarily in the payment space, the switch is an off-the-shelf package that comes with significant costs and transaction fees. We’ve run and maintained our own switch since 2013.”
The benefits of in-house development are substantial. “It allows us to operate at a lower cost per machine and a lower breakeven number of cash withdrawals per month per device,” says Russell.
While Spark develops its own software, it sources the hardware, the ATM machines, from a South Korean company. Designed to Spark’s specifications, these ATMs have up to now arrived in South Africa fully assembled.
But change is in the air, says Russell.
“Importantly, what’s coming up this year is we’re actually going to be assembling our own ATMs in South Africa for the first time. The components are going to arrive from various parts of the world and we’re going to put it together and do a lot of the engineering ourselves at our labs in Paarden Island in Cape Town.”
Local assembly of ATMs has not been done in South Africa before, Russell says, and will reduce the cost of ownership. Known as the Touchline, the new machine has a 22-inch touch screen, much faster transaction times and a Linux operating system, further reducing costs. “It will be the state-of-the-art device and very quickly become the gold standard in the country.”