Cardtronics plc provides automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks (collectively referred to as ‘ATMs’).
As of December 31, 2019, the company provided various services to approximately 285,000 ATMs worldwide. During 2019, approximately 64% of the company’s revenues were derived from its operations in North America (including its ATM operations in the U.S., Canada, and Mexico), approximately 29% of its reve...
Cardtronics plc provides automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks (collectively referred to as ‘ATMs’).
As of December 31, 2019, the company provided various services to approximately 285,000 ATMs worldwide. During 2019, approximately 64% of the company’s revenues were derived from its operations in North America (including its ATM operations in the U.S., Canada, and Mexico), approximately 29% of its revenues were derived from its operations in Europe and Africa (including its ATM operations in the U.K., Ireland, Germany, Spain, and South Africa), and approximately 7% of its revenues were derived from its operations in Australia and New Zealand. As of December 31, 2019, the company owned and operated approximately 74,000 ATMs, majority located in major retail locations across its markets.
Also included within the company’s network, as of December 31, 2019 were approximately 198,000 ATMs to which it provided processing services or various forms of managed services solutions. Under a managed services arrangement, retailers, financial institutions, and ATM distributors rely on the company to handle some or all of the operational aspects associated with operating and maintaining ATMs, typically in exchange for a monthly service fee, a fee per transaction, a fee per service provided, or a combination of these fees.
The company provides various ATM-based financial services at retail locations and other high-traffic locations, such as shopping malls, airports, train stations, and casinos. In doing so, the company provides its retail partners with an automated financial services solution. It also partners with financial institutions and other providers of consumer financial services to enable access to its ATMs through its surcharge-free solutions. Finally, the company provides managed service ATM solutions for retailers and financial institutions with a range of service offerings related to ATMs, including electronic funds transfer (EFT) transaction processing services, along with various other ATM-related services, depending on the needs of the customer.
The company operates ATMs under three arrangement types with its retail partners: company-owned ATM placements, merchant-owned ATM placements, and managed services (which includes transaction processing services). Under company-owned arrangements, the company provides the physical ATM and are responsible for various aspects of the ATM’s operations, including transaction processing, managing cash and cash delivery, supplies, and telecommunications, as well as routine and technical maintenance. Under merchant-owned arrangements, the retail merchant, financial institution or an independent distributor owns the ATM and is responsible for providing cash and performing simple maintenance tasks, while the company provides maintenance services, transaction processing, and connection to the EFT networks. It also offers various forms of managed services depending on the needs of its customers. Each managed service arrangement is a customized ATM management solution that could include various combinations of the following services: monitoring, maintenance, cash management, cash delivery, customer service, transaction processing, and other types of related services. As of December 31, 2019, approximately 26% of the company’s ATMs operated were company-owned, and approximately 74% of its ATMs were merchant-owned or operated under a managed services solution.
In addition to its retail merchant relationships, the company also partners with major financial institutions to brand selected ATMs within its network, including but not limited to BBVA Compass Bancshares, Inc., Citibank, N.A., Citizens Financial Group, Inc., Cullen/Frost Bankers, Inc., Discover Bank, PNC Bank, N.A., Santander Bank, N.A., TD Bank, N.A. (TD Bank), United Services Automobile Association in the U.S.; BMO Bank of Montreal, the Bank of Nova Scotia (Scotiabank), Canadian Imperial Bank Commerce, and TD Bank in Canada; the Bank of Queensland Limited and Holdings plc in Australia; and Capitec Bank, Mercantile Bank and Old Mutual in South Africa. In Mexico, the company partners with Scotiabank and Banco Multiva by putting their brands on its ATMs in exchange for certain services provided by them. As of December 31, 2019, approximately 21,000 of the company’s ATMs were under a bank-branding contract with approximately 500 financial institutions to place their logos on the ATMs and to provide surcharge-free access for their banking customers. It also provides managed service offerings for financial institutions, which include full outsourcing of a portion or all of the financial institution's ATMs.
The company also owns and operates the Allpoint network (Allpoint), a major surcharge-free ATM network (based on the number of participating ATMs). Allpoint, with approximately 58,000 participating ATMs, provides surcharge-free ATM access to approximately 1,200 participating credit unions, banks, digital banks, financial technology companies, and stored-value debit card issuers that are principally located in North America. Allpoint includes a majority of the company’s ATMs in the U.S., and certain ATMs in the U.K., Canada, Mexico, and Australia. Allpoint also provides services to organizations that manage stored-value debit card programs on behalf of corporate entities and governmental agencies, including general-purpose, payroll, and electronic benefits transfer cards.
Products and Services
Under its owned arrangement type, the company provides all of the services required to operate ATMs, which include monitoring, maintenance, cash management, customer service, and transaction processing. Under its merchant-owned arrangement type, the company provides transaction processing services, certain customer support functions, and settlement services. For ATMs under managed services arrangements (including transaction processing arrangements), the company receives a fixed monthly management fee and/or a fixed fee per transaction in return for providing the agreed-upon service or suite of services.
The company also earns revenues from other services at its ATMs, such as dynamic currency conversion fees, on-screen advertising, and other transaction-based fees across its various arrangement types.
The company has entered into multi-year agreements with various major merchant retailers, including Bi-Lo Holdings, LLC, Circle K Procurement and Brands Limited (Couche-Tard), Cumberland Farms, Inc., CVS Caremark Corporation (CVS), HEB Grocery Company, L.P., The Kroger Co., The Pantry, Inc., Rite Aid Corporation, Safeway, Inc., Speedway LLC (Speedway), Target Corporation, and Walgreens Boots Alliance, Inc. (Walgreens) in the U.S., BP p.l.c., BT Group plc, Co-operative Food (Co-op Food), Martin McColl Ltd., Royal Dutch Shell plc, Southern Railway Ltd., Tates Ltd., Waitrose Ltd., and Welcome Break Holdings Ltd. in the U.K.; 7-Eleven, Inc. in Canada and Australia, as well as Coles Supermarket Australia Pty Ltd. in Australia; Massmart Holdings Ltd. and Shoprite Holdings Ltd. in South Africa; and Total in Germany.
The company operates its ATMs under multi-year contracts that provide a recurring and source of revenue and typically have an initial term of approximately five years. For the year ended December 31, 2019, the company’s five major merchant customers were Co-op Food, Couche-Tard, CVS, Speedway, and Walgreens.
In addition to its bank-branding arrangements, the company offers credit unions, banks, digital banks, and stored-value debit card issuers and other providers of consumer financial services another type of surcharge-free solution to their customers through its Allpoint surcharge-free ATM network.
Segments
The company operates through three segments, North America, Europe & Africa, and Australia & New Zealand.
The company’s North America segment includes ATM operations in all 50 states in the U.S., Puerto Rico, Canada, and Mexico.
The company’s Europe & Africa segment includes its ATM operations in the U.K., Ireland, Germany, Spain, and South Africa.
The company’s Australia & New Zealand segment includes ATM operations in Australia and New Zealand.
Strategy
The company’s strategy is to leverage the expertise, scale, and network it has built in its largest markets and to continue to expand in those markets. The key elements of the company's strategy are to expand its relationships with major financial institutions; work with non-traditional financial institutions and card issuers to further leverage its ATM network; increase transaction levels at its existing locations; increase its number of deployed ATMs with existing and new merchant relationships; develop and provide additional services at its existing ATMs; and pursue additional managed services opportunities.
Sales and Marketing
The company’s sales and marketing teams are organized by customer type across retail and financial industries. It focuses on developing new relationships with national, regional, and local merchants, as well as building and maintaining relationships with its existing merchants and ATM distributors. In addition, the company has sales and marketing teams focused on developing and managing its relationships with financial institutions, financial technology companies, and stored-value debit card issuers as it focuses to expand the types of services that it offers to such organizations. The company’s sales and marketing teams also focus on identifying potential managed services opportunities with financial institutions and retailers alike.
Customers
In each of its markets, the company deploys its-owned ATMs under long-term contracts with major national and regional merchants, including convenience stores, gas stations, grocery stores, drug stores, and other high-traffic locations. The company’s merchant-owned ATMs are deployed under arrangements with smaller independent merchants.
Seasonality
The company’s overall business is somewhat seasonal in nature with fewer transactions occurring in the first quarter (year ended December 2019) of the year. Transaction volumes at the company’s ATMs located in regions affected by strong winter weather patterns typically experience declines in volume during winter months as a result of decreases in the amount of consumer traffic through such locations. The company usually sees an increase in transactions in the warmer summer months, which are also aided by increased vacation and holiday travel.
History
Cardtronics plc was founded in 1989. The company was incorporated in 2001.
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