7-Eleven decision to reduce 24-hour service might affect ATM business

CTBC considering profitability element: reports

A 7-Eleven in Keelung (photo by Solomon203)

A 7-Eleven in Keelung (photo by Solomon203) (Wikimedia Commons photo)

TAIPEI (Taiwan News) - A decision by 7-Eleven to end 24-hour service at 400 of its convenience stores might affect its cooperation on Automatic Teller Machines (ATM) with CTBC Bank, reports said Saturday.

Last month, the operator of 7-Eleven Taiwan, President Chain Store Corporation, announced that 400 of its 5,300 branches had already ended offering 24-hour service to customers.

However, the move is now likely to sink a plan by the country’s largest ATM operator, CTBC, to reach 6,000 ATMs by the end of the year, the Apple Daily reported Saturday.

The bank runs 5,836 ATMs, 5,100 of which are installed inside 7-Elevens, for a market share of 20 percent, with Cathay United Bank following as Taiwan’s second-biggest ATM manager, with 4,015 machines.

A major consideration for CTBC would be the cost and profit of running an ATM, the Apple Daily reported.

One machine costs NT$800,000 (US$26,000) and requires 300 transactions per day to be profitable when one considers the additional costs of manpower, repair, maintenance and transportation of cash.

If 7-Eleven reduces its opening hours but keeps rental fees for CTBC frozen at the existing level, it might no longer be profitable for the bank to continue its cooperation, the Apple Daily suggested.

An additional element in the relationship between the two companies was the recent theft of a complete ATM machine from a 7-Eleven in Hsinchu, which provoked fears about the safety of the funds and of the equipment, according to the Apple Daily.