Examination of Witnesses (Questions 460-479)
MR PETER
MCNAMARA,
MR ASHLEY
DEAN, MR
RON DELNEVO
AND MR
MARK MILLS
1 FEBRUARY 2005
Q460 Mr Plaskitt: Mr Mills, have you
had any communications from the LINK system by way of complaint
about any of the signage on your machines?
Mr Mills: I think we may have
had one some time ago, but nothing specifically that I am aware
of, Mr Plaskitt, but no doubt you will be able to quote one to
me.
Q461 Mr Plaskitt: No. I think you might
recognise this.
Mr Mills: I do indeed.
Q462 Mr Plaskitt: That is one of your
machines. It is actually the one that is in the motorway services
on the M40 at Oxford. Whereabouts on that machine is the sign
that tells the customer he or she is going to be charged for using
it?
Mr Mills: I think it is in two
places, if not 3, because I can see a sticker where the dispenser
of cash is, but also I think that we may display it on the screen
as well, and lastly we ask the question at the appropriate time
whether the customer accepts the charge and how much the charge
is.
Q463 Mr Plaskitt: It is there?
Mr Mills: Yes, near the dispensing
mechanism.
Q464 Mr Plaskitt: Down there?
Mr Mills: That's it.
Q465 Mr Plaskitt: That is where it says
it? How many of your customers operate the machine when they are
standing that far away from it? How many customers have 4-foot
long arms?
Mr Mills: Not many, I would imagine,
but I would add that that signage is when— The rule or the
code regarding eye-level was not necessarily in place then. We
have been telling people since inception that there is a charge
and, given the new rulings, we are upgrading how we tell them
by displaying it on all of the front screens, and we are going
to put it on the signage in accordance with the LINK rules.
Q466 Mr Plaskitt: I took this picture
last Thursday?
Mr Mills: It is not in place yet,
Mr Plaskitt, is it? We are compliant with the LINK rules.
Q467 Mr Plaskitt: At any rate, your customers
have not got 4-foot arms, so they tend to get closer to the machine
before they operate it?
Mr Mills: They get very close
to our bright orange machines, which do not display any banks'
names, which ask them the question if they are prepared to accept
the charge, and we clearly state that Cardpoint makes a charge.
They are welcome to withdraw and not be charged. Yes, they have
to get quite close to our machines to use them, but they seem
delighted, Mr Plaskitt, because they return, on average, every
3 weeks in two-thirds of the cases.
Q468 Mr Plaskitt: When they get closer
to the machine that it what they see, is it not? That is the same
machine when I was standing in the position to operate it.
Mr Mills: Sure.
Q469 Mr Plaskitt: Now where is the warning
that it is going to charge me?
Mr Mills: That is where we are
loading the warning on that says on every idle screen—
Q470 Mr Plaskitt: It is not there now,
is it?
Mr Mills: No, because we do not
have to be there at the moment, do we? We are compliant with the
LINK rules as they stand.
Q471 Mr Plaskitt: How long has this machine
been at Oxford services?
Mr Mills: Probably three years,
but we are happy to comply with all the LINK rules and will, and
currently do. As the new rules come in place it does take some
time to load the new software on to 2,800 machines.
Q472 Mr Plaskitt: But for three years
you have been happy to warn people's knees?
Mr Mills: No. With complete accuracy,
that warning was not on until probably 6, 12, 18 months ago.
Q473 Mr Plaskitt: No warning, and, if
you did put one on, down at knee level?
Mr Mills: With respect to how
the Committee may view our customers, our customers are fully
aware that this is a bright orange machine that does not belong
to their bank, and as they approach our machine and are duly asked
the question, and millions of times we have asked this question,
over a million times every month we ask the question, people invariably
say, "Yes", and withdraw money and seem very happy with
it. We do not get complaints from people about the machines in
that respect, so we are not sure that the customer is anything
other than perfectly aware of what is happening and perfectly
happy to accept the charge. In our exit interviews people say
they are delighted with the service on the basis that they save
time. They are prepared to balance the time saved against the
costs of the machine.
Q474 Mr Plaskitt: This is going to change
by July, is it not, with the new code?
Mr Mills: Absolutely. We are delighted
to tell people, wherever we are required to, that there is a charge,
because it is nothing different from anything we have ever done
anyway. We have always told people about the charge.
Q475 Mr Plaskitt: I want to move on now
to the deal you did with HBOS to buy their machines. Two hundred
and fifty of them you have converted to charging machines. Are
you planning to convert any more of them?
Mr Mills: It is purely down to
the economics. We are happy to run them for free where it is viable
to rely on the bank interchange; where it is not viable to rely
on the bank interchange, where the retailer elects to put the
charge on, depending on our negotiations with them, we will apply
the charge and keep the machine in service rather than be forced
withdraw it.
Q476 Mr Plaskitt: So you are not sure
whether any more will convert or not?
Mr Mills: If I were to hazard
a guess, I would say that probably more will—that was the
point of doing the deal—but those machines would have been
closed, and, despite what anybody might guess, it is unlikely
that many or any of the banks would rush in behind if we withdrew
those machines and install another free one because they are just
not economically viable.
Q477 Mr Plaskitt: In which case, can
I ask you a few questions about statements you made in your Executive
Officer's Report to your shareholders where you have got quite
a lengthy discussion about this deal. I will quote what you said:
"The principal challenge for the company"—that
is you—"was to persuade retailers to accept new
terms and conditions encouraging as many as possible to move from
a free to cardholders' business model to one where the cardholder
pays a charge." So you are actually actively out there encouraging
retailers to switch them from free to charging?
Mr Mills: Yes, because otherwise
we have to withdraw the machine, which to me does not seem very
good customer service to anybody. When asked, and if you do ask
the consumers, "Would you rather have a machine which charges
and you are free to walk past it and never use it, so hopefully
it will not degrade your standard of living", or "Would
you rather have a machine there that charges but you can use it
or not, or not have a machine at all", the vast majority
of people say, "I may never use it, but I would certainly
rather have the service should I elect to use it."
Q478 Mr Plaskitt: But you are out there
trying to incentivise the retailer to switch these things from
free to charging, are you not?
Mr Mills: Correct; that is our
business model. We built our business on charging people openly
and transparently asking them the question, and our customers,
of which there are millions every month, seem delighted to pay.
Q479 Mr Plaskitt: It is interesting to
read what you go on to say: "It was always anticipated that
not all of these machines would be immediately converted to the
charging model, and, once the non-charging machines are operating
profitably, there is a further opportunity to convert these machines
to the charging model with the benefit of further improved profitability"?
Mr Mills: Correct.
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