U.S. Bank Offers Mobile Minutes at the ATM

Prepaid mobile phone users will now be able to add airtime minutes to their plans through U.S. Bank's ATM network of nearly 4,000 machines. Minneapolis-based U.S. Bank ($180 billion in assets) will rely on Boston Communications Group Inc. (BCGI) to perform the back-office management functions for the new service.

On the front end, U.S. Bank modified its entire arsenal of 4,000 ATMs across 24 states to support the service, including both Windows-based ATMs and its legacy machines. "We didn't have to do any kind of upgrade to the physical ATM," notes Patty Henneke, vice president and ATM banking manager, U.S. Bank. "It's just another transaction type."

After authenticating their identifications at the ATM in the normal fashion, customers would select the option to add minutes and enter a mobile phone number. Behind the scenes, the information would be passed to BCGI, which would verify the validity of the phone number and then ascertain that the customer's telecom provider is a participant in the program.

Both U.S. Bank and BCGI will share in the revenues from the sale of airtime minutes, which are priced in accordance with the customer's existing service plan. "There is no markup to the customer," says Henneke. "Whatever their original contract was with their third-party provider, that remains the same."

Also, U.S. Bank gains a revenue opportunity from surcharges levied on customers of other banks. The payment to a mobile company would be treated as a form of withdrawal, and so U.S. Bank would not only have the ability to assess a surcharge, but the card-issuing bank might assess a fee for out-of-network usage. "That's up to the bank that issues the card," says Henneke.

Nevertheless, 24-hour-a-day access to additional airtime minutes might come in handy. "It's a matter of convenience, and where you are when you run out of phone minutes," adds Henneke.

Extremely popular elsewhere in the world, prepaid mobile phone service has also gained a substantial foothold in the U.S. with 15 million users. "It's really popular with people who don't have credit yet and don't qualify for a prepaid plan," says Henneke.

Other users include adults who use cell phones infrequently, but who still carry a phone for safety and convenience, she notes.