EnCash seeks more ATM outsourcing deals

EnCash is an independent ATM developer and a member of Megalink network, is seeking to outsource its services mainly to — thrift banks and rural banks.

EnCash chief executive Eric Severino said they have the facilities and expertise to run an ATM network for a bank.

Presently, EnCash is awaiting the approval of the Bangko Sentral ng Pilipinas (BSP) to operate two ATM units for the Development Bank of the Philippines (DBP).

“In fact, we are also in talks with rural banks for set up a system in that direction,” Severino said during a press presentation yesterday.

Recently, the Bank of the Philippine Islands-operated ExpressNet outsourced its ATM network to BancNet to remain focused on its core banking business. BPI has been operating the ExpressNet switch but has decided to outsource peripheral services such as ATM operations. The country’s three major ATM operators (BancNet, ExpressNet and Megalink) were interconnected in 2005.

Thrift and rural banks find it expensive to operate their own switch, but realize that setting up an ATM service is vital for retail and consumer banking services.

EnCash generally offers deployment of its own ATM units to thrift and rural banks. But it has also branched out to non-banking entities like local government units, groceries, gasoline stations, convenience shops, schools and pawnshops.

Interested entities need only an initial investment of approximately $2,000 (roughly P100,000) per unit. EnCash estimates that it will take less than a year to realize return on investments as they earn from transaction fees.

ATMs are generally operational 24/7 and in the case of EnCash, it is wireless,thus not dependent on the presence of telephone landlines.

“All it needs is some space, electricity and the regular supply of cash,” EnCash executives said.

In the United States, practically all the so-called mom-and-pop stores (convenience stores) have their own ATM machines. It is also ideal in areas where families of overseas Filipino workers (OFWs) are located. Some pawnshops have made arrangements for remittances or money transfers with commercial banks and find it practical to install ATMs within their premises.

So far, EnCash runs 71 ATM units nationwide averaging P7 million in transactions daily.

“By the end of 2008, we expect that to grow to 150 units,” Severino said. EnCash started full operations only in 2007. It has working arrangements with the Philippine Long Distance Telephone Co. (PLDT) for the wireless operations of its ATM units.        — Ted P. Torres