Cardtronics is the largest non-bank owner and operator of automated teller machines (ATMs) and related financial services equipment in the world. It maintains more than 62,800 cash machines in the US, UK, Canada, and Mexico. More than 15,000 of those machines are branded by banks such as Chase, SunTrust and Citibank. The company also leases and sells machines to airports, convenience stores, supermarkets, malls, and drug stores. Most clients pay the company to handle some or all of the maintenance services or operational services of their ATMs. Cardtronics also operates Allpoint, which is the largest surcharge-free ATM network in the US with 43,000 machines.
Cardtronics operates its ATMs under two arrangements with customers. Under the company-owned ATM arrangements (representing about 65% of its network), the firm provides clients with the machines and all related services, including cash replenishment, telecommunications, and maintenance. Most of the company's national and regional customers opt for this plan, under which Cardtronics pays a fee to clients to place its machines on their premises. Smaller clients usually enter into the merchant-owned plan, in which the merchant owns the ATMs and is responsible for their maintenance and cash replenishment.
Cardtronics operates in the US (including territories of Puerto Rico and the Virgin Islands), the UK, Mexico, and Canada.
Cardtronics has benefitted from several trends in the market place. Cardtronics has seen an increase in revenue and number of transactions as its network has grown and as overall cash usage has increased (and credit availability has decreased). Revenue increased by more than 17% in 2011. Profits also have continued to climb. Net income increased by more than 70% in 2011. The results were driven by the expansion of Cardtronics' network and increase in the total number of transactions conducted on the company's ATMs.
Worldwide ATM network expansion is at the top of Cardtronics' strategy. It continues to seek opportunities in the UK and Mexico, which are operated by its Bank Machine and Cardtronics Mexico subsidiaries. Cardtronics also entered Canada with the 2011 purchase of Mr. Cash ATM Network (renamed Cardtronics Canada). The deal added some 600 machines throughout the country. In late 2012 Cardtronics Canada acquired privately-held Can-Do-Cash, Ltd., an ATM services company headquartered in Ottawa. Other target growth areas include Central and Eastern Europe, Central and South America, and the Asia/Pacific region.
Cardtronics also is growing its network in the US. In 2011 the company expanded its footprint in the Midwestern US with the $145 million purchase of EDC Holding's ATM business. The deal added about 3,600 ATMs to Cardtronics' network. Also that year the acquisition of Access to Money added more than 10,000 ATMs in the Southeast.
In addition to growing its ATM network the company also is interested in expanding its service capabilities. In another 2011 deal Cardtronics acquired LocatorSearch, a provider of search technology to the financial services industry that allows customers to search and find the nearest ATM. In 2012 the company bought Midwest-based machine support provider ATM Network, adding some 6,200 ATMs to its service network.
Other growth initiatives include building the company's Allpoint surcharge-free network in the US and to introduce it in Cardtronics' international markets. Under the Allpoint model financial institutions pay Cardtronics for participation, instead of users paying transaction fees. In 2010 Allpoint entered Australia's market through a partnership with that country's largest ATM operator, Customers Limited. The following year Allpoint entered Mexico by adding more than 2,500 ATMs across the country.
Cardtronics also has attracted new customers who use prepaid debit cards to make cash withdrawals. These unbanked or underbanked customers previously could not use ATMs. However, increased use of prepaid cards have allowed those users access to Cardtronics' kiosks. In 2010 Cardtronics struck a deal with MasterCard to offer free ATM access for prepaid cards. Also that year Univision launched a prepaid card product utilizing the Allpoint Network. The company plans to go after other opportunities to work with financial institutions that issue stored-value debit cards. – less