CASH ACCESS STRATEGY PART TWO
Cash access UNLEASHED
Scott Dowty, PCIP
Fees…the good, the bad, and the “ouch!”
The reality is that fees for CA transactions are both accepted and expected by the public, and they offer the GE an excellent revenue opportunity, both from fees and incremental gaming revenue. The opportunity varies from market to market as dictated by gaming legislation and local best practices. In the US, for instance, operators view CA fees as a critical revenue driver and enjoy up to 90% of transaction fees levied. Further, operators typically retain 100% of the incremental revenue generated by fee increases. However, most GEs use a one-size-fits-all approach to fees, and this does not extract maximum CA revenue. Consider two patrons: Becky and John. Becky
has been at the Blackjack table for an hour, her average bet is $50, and her average tip after a decent win is $5. She has been enjoying complimentary beverages and started with a $500 bankroll. Becky—down for the session and wanting to get back in the game—will visit the ATM by the high-limit tables that has a maximum dispense amount of $3,000, an average dispense of $1,200, and a fee of $5.99. She will easily rationalize the fee—$5.99 for a $1,200 transaction…that’s a bargain! Over the course of the night, she may cycle through two or three different bankcards to maximize her limits on each. Ultimately, whether she wins or loses, she will justify the associated costs and return another night. Meanwhile, John has lost his $400 and visits
the ATM by the 50-cent slot machines to withdraw another $200. This ATM has a maximum dispense of $1,000, an average dispense amount of $400, and a fee of $5.99. As a percentage of the transaction amount, patrons using the second ATM are paying a 300% premium over patrons using the first
32 FEBRUARY 2017
ATM, even though they are more fee-averse! John will complete his transaction but remember exactly how much he paid in fees as he neatly folds the series of ATM receipts in his pocket. Later, when he reviews his monthly bank statements, John may see that the bank applied an “off-network” fixed fee to each transaction. Ultimately, his experience with the cash advances will be a negative one. The message is simple: much can be done to maximize CA revenue while enhancing the patron’s experience. SSKs that provide ATM, bill breaker, TITO, and other services have improved the process and facilitate a much smarter CA strategy—it’s the software driving these SSKs that must evolve. Dispense limits by POI, tiered fee structures by dispense amount, CA fee by origin, bill mix strategy, and more all play into the importance of customizing a robust CA strategy. The good news is that historical data is available—we just need to take the time to understand the opportunity.
Cash access options: ATM, Check Cashing, DCCA & CCCA The most common CA transactions in a GE
are PIN ATM transactions, but they can be either the cheapest or the most expensive for the cardholder, depending on the cash dispense amount limits. If the average withdrawal amount is $400 and the fee is $3.99, the fee represents less than 1% of the amount. However, if the withdrawal amounts range from $20 (minimum) to $100 (maximum), the value changes very quickly. Cardholders may repeat a $20 withdrawal a dozen times within a 24-hour period–paying a fee of $3.99 each time–which represents a 20% surcharge and not what any GE or VAR encourages. This is why GEs must think through their ATM pricing and dispense
of your cash access strategy in the second part of this two-part feature.
, Payments Executive and investor, explains the importance
amounts all the way up the CA food chain— ATMs through CCCA. Another important attribute of CA
transaction types is the ability of the cardholder to “fish” for an approval after a decline. This refers to the process by which the cardholder lowers the requested amount by $20, $40, and so on to gain an approval. With ATM transactions, cardholders are able to view the available balance, but approvals depend upon the daily withdrawal limits. This is also true for DCCA and can become a source of great frustration for cardholders as they cannot access their “available” funds because of daily limits. GEs can include “Balance Inquiry” as part of the CA commission payment. Once a cardholder has exhausted their ATM withdrawal limits for the day (usually a 24-hour period), the VAR’s ATM or SSK software will conveniently persuade the cardholder to consider the more expensive and higher limit CA transactions: DCCA and CCCA. Check cashing is an important CA alternative and most popular in the US. Generally, the GE does not charge the patron for the service but pays the check-cashing provider 2–4% of the face value with no risk on bad checks. GEs offer check cashing to promote play and enhance relationships with primarily local patrons. There are patrons who use the “float” associated with check cashing as a form of “credit” or “marker” to play without the cash up-front and minimal CA fees. The availability of check cashing, markers, and credit does have a profound impact on CA and related patron behavior. The availability of these services varies by country and jurisdiction and is another reason why a flexible CA platform is so valuable. DCCA and CCCA are often lumped together
as both transactions are performed on standard POS terminals, either with a
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82
