The Financial Times

AUTOMATED TELLERS: 

Cashing in on the hole-in-the-wall
21st July 99

A software platform will soon connect users to the internet, writes James Buxton

A UK software company is playing a key role in enabling automated teller machines (ATMs) to lose their fixation with cash and offer other services from remote businesses.

Edinburgh-based KAL has developed Kalignite, a software platform for connecting ATMs to the internet, using Microsoft's Windows NT operating system.
In the US kiosks, ATMs that do not supply cash but other services, are spreading fast. The latest ATMs, sited away from banks, will enable customers to withdraw cash, buy cinema tickets, which the machine prints itself, and make hotel reservations.

This trend is now reaching the UK. Last month Moneybox, a subsidiary of Ambient Media, the Aim-listed company, announced it would install 1,000 ATMs in convenience stores and petrol stations in the UK, later spreading to nightclubs and betting shops. As well as dispensing cash they will sell cards for prepaid mobile phones and run promotional advertising.

Aravinda Korala, KAL's managing director and the architect of Kalignite, says ATMs and kiosks are set to become a new delivery channel for the internet. "In spite of what we hear about the spread of the internet, only a third of homes in the US have access to it and in the UK the figure is only 20 per cent. ATMs, on the other hand, are ubiquitous and everyone knows how to use them."

Until now ATMs have been proprietary - controlled exclusively by the organisation, such as the bank, to which they are connected and using only that company's software. The same is true for other kinds of self-service machines such as automatic ticketing dispensers for airlines at airports.

Dr Korala says Kalignite is the only platform that both uses the XFS open standard for ATMs and can access the internet. Once ATMs can access the internet they can communicate with more than one provider of services or goods. Sophisticated ATMs will one day print documents such as airline tickets or insurance certificates, he believes.

Theoretically somebody could browse the entire internet from a web-enabled kiosk or ATM. In practice, Dr Korala believes, kiosk providers will simply offer customers access to a manageable number of websites.

According to Frost & Sullivan, the US market research organisation, the number of web-enabled kiosks being installed worldwide annually by 2003 will have reached 445,000. This suggests they could overtake traditional ATMs. Studies by Retail Banking Research foresee these growing from a worldwide installed base of 700,000 to 1m by 2002.

Whereas an ATM incorporates a safe to contain banknotes and weighs about one tonne, a kiosk is far lighter and cheaper.

KAL's software platform is being used by about 20 systems integrators and hardware companies in the US and Europe to write applications, and is being evaluated by a further 40. The company, which employs 25 people, works with the main ATM vendors such as NCR, Diebold and Tidel of the US, and Fujitsu of Japan.

Tidel recently launched an ATM product called Chameleon which incorporates Kalignite and can dispense cash for a surcharge and dispense tickets and other items.

KAL has been helping Huntington Bancshares of Columbus, Ohio, develop a pilot kiosk system by which customers will be able to access the bank's web site and make banking transactions. The kiosks will be sited in halls of residence where they would be used by students who did not have access to the internet via a PC.

Alaska Federal Credit Union, another customer of Kalignite, is planning to launch a similar kiosk that would offer other internet services such as purchasing goods. Here NCR is the prime contractor.

Web-enabled kiosks would be useful, Dr Korala says, in issuing tickets for several airlines from one machine. Having helped Continental Airlines install electronic ticketing kiosks, he says: "Collecting tickets at an electronic kiosk saves queueing at the airport.

"But you couldn't have hundreds of machines for dozens of airlines at every airport - they take up a lot of space and space costs money."

The next stage, he believes, will be the development of web-enabled machines communicating with the mainframes of several airlines.

At present, Moneybox's ATMs, which use a different technology, will not be linked to the internet. But later, says Paul Stanley, managing director, they will be - enabling people to purchase goods and bringing e-commerce to the cash machine.

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