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Cardtronics set to stir up European ATM market

US-based ATM services provider Cardtronics's acquisition of European counterpart Cardpoint last week appears to show there is confidence that cash will retain its prominent role in society for the foreseeable future and that a contactless world has not arrived quite yet.

In a deal worth around £100 million completed on 7 August 2013, Cardtronics took ownership of the company which trades as Cashzone in the UK and Cardpoint in Germany. The two businesses will now trade under the Cardtronics Europe banner alongside the Bank Machine brand acquired by Cardtronics in 2005.

Cardpoint's terminals are found in retailing, banking and service station outlets throughout the UK and Germany, and have been in operation in the UK since 1999.

Paul Rodgers, chairman of the card and payments membership organisation Vendorcom, told Essential Retail that the move is a positive one for the wider industry, and comes at a time when ATMs are still very much in demand across Europe.

"Their involvement in Bank Machine has brought a buzz to the ATM world, stirring it up and making cash more accessible," he explained.

"Cash continues to be essential in all merchant payments and even though we continue to see growth in contactless payments, the ridiculous assertions that contactless payments will lead to the death of cash are simply a misguided fantasy and typical of the hyperbole that typifies much of the electronic transactions world."

Jonathan Simpson-Dent has been appointed managing director of Cardtronics Europe, having served as Cardpoint's CEO since February 2012. He will report to Steve Rathgaber, CEO of Cardtronics, while Andreas Raabe will continue in his role as managing director of the business's German operations.

Rathgaber said the acquisition means Cardtronics has established the foundations from which the business can grow and complement its North American arm.

"This combination of the Cashzone, Cardpoint and Bank Machine ATM portfolios creates scale, synergies and geographic coverage on a level much quicker than its constituent parts could have achieved alone," he noted.

Although Vendorcom's Rodgers does not believe that cash is close to dying out anytime soon, despite what some technology solutions providers may suggest, last week's coming together of two ATM companies is perhaps an indication that there is more market consolidation ahead.

Recent news of the European Commission's cap on multilateral interchange fees could well make credit and debit transactions more attractive to merchants of all types, too, "and particularly those who currently don't take card payments", according to Rodgers.

"I hope the consolidation that will inevitably happen amongst ATM operators due to the external pressures on cash volumes and margins will ensure that these companies can survive and that we won't lose ATMs from our high streets and, even more importantly, from our rural economies," the Vendorcom boss added.

"The UK lags behind many European countries in the services provided at ATMs so perhaps we will see even greater focus on value-add services from these consolidated organisations. We can but hope!"

Cashzone has 7,100 machines in the UK, of which 1,800 are free-to-use ATMs, and they are primarily located at independent convenience stores and service stations. Cardpoint operates 800 ATMs in Germany, and the country has been identified as having significant growth potential in terms of machine installation in the years ahead.

Rathgaber commented: "The combined enterprise to be formed from this transaction, Cardtronics Europe, can harness each organisation's skills and resources to build a European platform poised for sustainable growth in the UK and expansion into attractive markets such as Germany."