The MBC1031

Check cashers are "very paranoid" about security, Zerman said, and for good reason. "It's not just the money in the machine. If they go out into the lobby, they're taking a chance that someone could put a gun to their head and say 'take me to all the money in the back.'"

At first, Midwest Bancard purchased a product called the MicroTouch 2001 from the now-defunct manufacturer Sterling Technologies. Though it was designed to be a front-load countertop machine, Midwest Bancard made some modifications, including adding a screen and keypad inside of the machine that allowed all management functions to be performed from the rear.

After a dispute with Sterling, followed by that company going out of business in 2001, Zerman said his company evaluated the other options in the marketplace, found them lacking and decided to make its own ATM. "We were confident that we could sell 100 to 200 machines a year with our existing customer base. We were getting reorders from them every month," he said.

In a scaled-down version of the eFunds business model, Midwest Bancard also hopes to increase its processing business through machine sales, Zerman said. To help convince potential distributors to utilize the company's processing services, its MBC1031 ATM -- which carries a wholesale price in the $4,000 range -- is priced lower if purchased with a processing contract included.

The company established a distributor program three months ago following the certification of the MBC1031 by EFTLogix, Core Data Resources and Concord EFS. Zerman said he'd like to recruit a dozen distributors to sell the machine to help meet his goal of deploying 1,000 of the units in the next three years.

Midwest Bancard created the MBC1031 using a component kit it purchased from Hurst, Texas-based manufacturer Greenlink Technologies (GTI). Greenlink CEO Charlie East helped Midwest Bancard tweak the design for the machine, Zerman said.

In fact, Greenlink liked the idea of a retail-oriented through-the-wall ATM so much it began producing its own version, the TTW 1000. The two machines share many features, although the MBC machine has a built-in frame that Zerman said makes it one of the easiest through-the-wall machines to install, a front panel with a built-in, backlit ATM sign and a slightly different keypad layout. A weatherized model allows for exterior installations.

Greenlink purchases the stainless-steel cabinets for its machines, which are manufactured in Chicago, from Midwest Bancard. Because of the companies' close relationship, Zerman said there is room for both ATMs in the marketplace.

"If someone is just buying hardware, it doesn't matter to me whether they come to me or to Greenlink. Either way, they make money off the components and we make money off the cabinets," Zerman said. "In a tough business, I think two companies can be better than one."

While the design process took more than a year, Zerman found setting up a manufacturing operation was not that difficult. MBC added 600 square feet to its existing 2,200-square-foot office and used its own service technicians for assembly, bringing in students from a local technical college when it needed extra manpower.

Finding a steel fabricator to produce cabinets to his specifications was probably the toughest part, Zerman said, largely because of his requirement for a ¼-inch thick rear door. After interviewing more than 20 candidates, Zerman found a fabricator that will produce a run of 100-200 units and -- a bonus -- store them at its facility so that Midwest Bancard can maintain a small "just in time" inventory.

MBC has sold some 200 of its machines since October, most of them through its direct sales force. The company owns and operates 25 of them. It is already working on its next model, a drive-up model with a kiosk enclosure. Zerman said the company also has plans for a two-cassette version of the MBC1031.

Small companies like his are more responsive to the retail market than the "Ts," Zerman believes. "We're innovative because we have to be to survive," he said.

Article excerpted from ATMmarketplace.com