Cypress Advantage

Bringing ATMs to Amusement Locations for Over 20 Years

by Hank Schlesinger

Founded in 1997 by the husband-and-wife team of Michael and Samantha Guthrie, Cypress Advantage has carved out a niche as ATM specialists for the music and games industry. The company offers a wide range of services, including equipment sales, processing and consulting, and serves a nationwide client list of operators both large and small.

“We specialize in amusement route operators…that’s our market,” Michael said. “We sell them the hardware and wireless modems, provide technical support, and help them get the full income potential out of their machines. The majority of our customers have between 30 and 100 locations, but we do have some that have over 500.”

What’s one of the key selling points of an ATM versus traditional amusement equipment? “I tell them this is the only piece of equipment they’ll never have to swap out,” Michael said.

Seeing Opportunity

The Guthries, who have their own non-competing ATM route in Spokane, Wash., entered the music and games industry via a trip to an AMOA show more than a decade ago.

“There were ATMs at the show, but we knew we could do better on the price,” Samantha asserted. “We have a business model that allows us to process transactions and buy equipment in quantity at a discount, but we also knew we could provide a higher level of service. We’ve been in the field and we’ve seen it all.”

However, as the Guthries are careful to note, although they may understand the games business, they don’t participate in it. They don’t compete with their customers, they declare.

As Samantha and Michael explain it, the move by music and game operators into ATMs was inevitable. Many locations that would have been only marginally profitable for dedicated ATM deployers turned out to be very viable for game operators because they already had equipment on site. Also, they note that ATMs are less expensive than the majority of amusements, typically paying themselves off in less than a year and also not needing to be replaced with new models or eating up a lot of high-value floorspace.

However, not only were ATMs a good fit for their existing music and game operators, they found that an ATM in the right venue can significantly increase income on the games. As the Guthries point out, in some cases that machine synergy between music, amusements and an ATM can boost cashboxes totals as much as 30 percent.

“And let’s face it,” said Michael. “If the operator is not providing the ATM for their customers, then someone else is. So, if someone else’s machine runs out of cash, the other equipment can have a lower volume.”

As the Guthries saw it, the missing ingredient in those early days of music and games operators moving into ATMs was a hands-on approach to sales. Although operators may have already had the locations to place ATMs along with the infrastructure to service them, ATMs were a whole new technology and operational concept for many of them. “The first thing a new ATM operator needs to learn is how to program the machines and manage their cashflow,” Michael said.

At its most basic level, amusement operators are more accustomed to taking cash out of a location than carrying it in. That is to say, just how much cash does a particular location require in a machine? Tying up undue amounts of cash in an ATM doesn’t benefit the operator, customer or location owner.

“We usually suggest they load a new location with $4,000 and see how long it takes to go through,” Michael said. “The games’ cashboxes are a good indicator if the ATM is going to work well in a particular location and how much money it will run through in a week or a month. There is a period of adjustment and fine turning. There are also software modules that can help you predict cash requirements.”

When Timing & Opportunity Meet

Michael and Samantha’s entrance into music and games could not have come at a better time. Amusement operators were just entering the ATM field as locations began to open up. Many venues, which had previously owned and operated their own ATMs, were looking for outside operators in the wake of the 2008 recession. That adoption continued as additional locations began searching for outside operators with announced requirements for EMV retrofits that proved too costly and technical to handle in-house.

“I would say there is probably a 90 to 95 percent penetration into the games market,” Samantha noted. “However, what we’re also seeing is game operators moving into new types of locations with ATMs. They’re out on the street and see what construction is happening and what stores are opening and closing. A lot of them are finding locations that have no amusements but are good for an ATM. Usually, it’s nearby one of their existing locations.”

The current COVID-19 crisis has presented some unique challenges for ATM operators. Not only have many of their locations closed, but those remaining open, such as grocery stores, delis, and other essential venues, have experienced an uptick in usage. This means recalculating how much cash is needed. At present time, the Guthries are advising operators to update the software in machines that are currently in use, as well as those located in closed venues. That includes turning on additional revenue producing features, such as Dynamic Currency Conversion (DCC), cryptocurrency and Dual Balance functions.

As venues begin opening up for business, operators will need to form new strategies tailored to their area. and Samantha says Cypress will be there to help them re-enter the market in an efficient way. “We are dedicated to our industry and understand that our partners rely on our exceptional service and support to best position themselves when this COVID crisis is over,” Samantha said. “We seek constant improvement to assure operators the highest level of success. We know we are better together.”