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Korean ATM maker hits jackpot abroad in cashless society

By Oct 20, 2020 (Gmt+09:00)

3 Min read

Sberbank of Russia, the country's No.1 bank, unveiled its cutting-edge automated teller machine (ATM) last month in a virtual event. The newly revealed ATM was something new compared to conventional machines. Users could deposit and withdraw cash, but also purchase airline tickets, call a taxi, reserve movie tickets and even sign up for parcel services.

South Korea's ATM maker Hyosung TNS Inc. is the supplier of this eye-catching machine at the center of Sberbank's digital transformation. Hyosung TNS is set to ship around 54,000 ATMs to the Russian bank by 2022. The domestic ATM maker is thriving in a cashless society thanks to its machines hitting the jackpot abroad.

“This will be the first year for us to exceed 1 trillion won ($878 million) in revenue thanks to orders from abroad, like Russia,” said a Hyosung TNS company source.

ATMs are a fading industry in Korea and the market is stagnant as consumers prefer credit cards and mobile payments given the declining use of cash. Banks are continuing to cut back on their number of ATM machines. According to the Bank of Korea, the number of ATMs in the country dropped from 70,105 in 2013 to 55,807 last year.

Luckily, Hyosung TNS had set its sights abroad early on, recognizing that there is still a substantial demand for ATMs in Russia, the US and India, among other overseas markets.

Hyosung ATM machine
Hyosung ATM machine

Hyosung TNS introduced its Cash & Check Recycler Machine (CCRM) which allows users to both deposit and withdraw cash via a single machine, a unique service as most overseas markets operate a separate machine for deposits and withdrawals.

The Korean ATM maker said that using a CCRM would benefit not only the users but also banks as it would cut maintenance costs and save time. Hyosung TNS hit the jackpot in the US as demand was explosive, accounting for almost 47% share in the market there and outperforming US-based ATM makers Diebold and NCR Corporation.

Hyosung TNS expects to see a rise in demand for CCRMs as they account for only 28% of 3.2 million ATMs globally. Once the existing lifespan of an ATM runs out, most of them are likely to switch over to CCRMs.

The Korean ATM heavyweight also participated in the Rural ATM project led by the Mexican government to install ATMs in rural areas. Hyosung TNS will deliver 8,000 ATMs to Mexico, and once the project is completed, the company will see its market share climb to around 15% in Mexico.

The company also exported ATMs to Nigeria equipped with a fingerprint recognition feature given prevalent theft and duplication issues in the country. These gained quick popularity among Nigerian banks, which rushed to adopt Hyosung TNS ATMs.

The spreading of the coronavirus this year posed challenges for the company,  such as travel restrictions preventing Hyosung TNS from traveling abroad to meet with clients as well as the shutdown of banks in countries with a high rate of COVID-19 patients.

Yet the coronavirus impact triggered an inflow of new orders due to an increased number of banks using ATMs for their operations amid social distancing measures. Hyosung TNS received fresh orders from banks in Europe, alongside increased requests to replace ATMs in India and Indonesia. The surge in orders led to a 5% year-on-year increase in the company's revenue in the first half of this year.

Meanwhile, the domestic ATM maker is expected to go public, although details have not been disclosed. Hyosung TNS posted record operating profit of 96.5 billion won ($83 million) in 2019 on the back of strong ATM sales in overseas markets.



Write to Jae-kwang Ahn at ahnjk@hankyung.com
Danbee Lee edited this article.
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