Mobile payments app Spare wants to kill the ATM.
Spare is a product of startup Mercuri Systems, headed by entrepreneur D’Ontra Hughes. The idea of Spare is to make businesses, in this case hotels, into cash-dispensers, obviating the need for ATMs, which often carry hefty fees and subject users to the risk of identity theft from card skimmers.
The beta test beginning this week will run for a few months at several Los Angeles-area hotels.
The idea came from when Hughes was working at a large Los Angeles-area hotel that had a popular bar inside. Neither the bar nor hotel lobby had an ATM, so customers had to cross the busy street in front of the hotel to use a third party ATM if they wanted to have cash on hand. Hughes had the insight that it would make more sense if the hotel or bar, both of which had cash behind the counter, could simply dispense it to customers. This is what Spare hopes to accomplish.
The idea has potentially wide-reaching applications. Why would a convenience store or fast-food restaurant, with plenty of cash in the till, give over valuable space to an ATM that collects fees for a third party?
To use Spare, a user enters a request for funds, say $200, in the mobile app, which is linked to a funding source, such as a checking account. When the user arrives at the hotel, which is also linked to the Spare system, he is simply given the $200 when checking in because the hotel knows who he has and has seen the request for funds, which can be added seamlessly to his bill.
In short, Spare is looking to make the movement of money easier, and is leveraging the mobile phone and customers’ need for cash. It is also part of the invisible payments movement headed by Uber — making the presentation of a payment device unnecessary.
It is very early days for Spare, and the results of its beta test will be telling, but the idea seems to make a great deal of sense and eliminates a pain point. It could be a revenue source for businesses and certainly provides convenience to customers, not to mention security from ATM skimmers, though with news of the recent Marriott hack, it seems nothing is safe anymore.
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So maybe kill the non-bank branded ATM’s…but I dont’t see where this would eliminate the ATM, especially in the suburbs/rural areas where most people drive to an ATM.
Philip,
you mentioned “Why would a convenience store or fast-food restaurant, with plenty of cash in the till, give over valuable space to an ATM that collects fees for a third party?”
Some of those stores and restaurants own the machines and the fee is all theirs or they have a revenue share deal with the machine owner.
Spare and its use of mobile technology is a great idea. Whether they can dis-intermediate the 3rd party ATMs vendors remains to be seen.
@dmgerbino
Thanks, David. Yes, some do, but it’s of course those that do not that could be prospects for a Spare-like service.
I am sure the Hilton and Marriott as well as other hotel chains want to keep large sums of cash on premise and invite someone in to hand a note to a hotel clerk with the words ” fill this bag up”. If you consider most ATM’s on a weekend contain a large amount of cash.
This is stupid. Any hotel you are staying at you can cash any check at the hotel desk for cash. Some have a limit per day. I have done this for years rather than use an ATM.
Locations often get a fee; some even own the ATM machine or lease it, and get
a fee. Why give it up, as well use up the cash in your drawer.
As well as those with large stock accounts, have free ATM access anywhere as part
of their portfolio plan. Some banks offer this to those with large cash deposits
or investments or with lines of credit.
Thanks, Kit — but checks? What are those? Ha ha.
Very innovative thinking!
This is genius, I am constantly looking for an ATM that won’t care me an arm and a leg. Being able to find this will free up a lot of time. 5 stars to this Mr. Hughes!
This couldn’t have come any sooner. Will definitely be using this in the future!
Genius idea. Not only is this convenient for the average business person, using the comfort of an existing security, but an attractive marketing tool for businesses.
Great concept! Can’t wait to try it out!
Great innovative idea!Sure beats all those banking fees.I will give it a try when it’s up and running.
I think Spare is a genius idea. There are so many instances where I didn’t have cash and had to run across a busy street. Not only does the idea make the exchange of money more convenient, it also provides safety for the individual. Count me in as a definite spare user!
I’m really looking forward to Spare. Sounds like an innovative no brainer for drawing cash out. Can’t wait to try it!
“When the user arrives at the hotel, which is also linked to the Spare system, he is simply given the $200 when checking in because the hotel know who he has and has seen the request for funds, which can be added seamlessly to his bill.”
As a hotel, why would I need Spare if I am going to add the $200 to the guests hotel bill anyway? The guest can ask for $200 and add it to the bill.As a Spare user, from the way it is written it seems as if the users checking account is debited for the amount and then added to the hotel bill. So I get a debited from my account and then turn around and have to pay for it when I check out?
This is an awesome idea for your average consumer!
Hi All,
SPARE is finally ready for Beta Testing. It has been a long road, but we have a working prototype in iTunes Connect. Our invitation Roll-out won’t last long, so please sign up quickly.
I would also like to share… While convenience in finding cash is a supreme motivation for building SPARE, those increasingly problematic ATM skimmers (we all hear so much about) are also a large part of our motivation to create our safe and convenient platform.
SPARE allows its Users to order cash on the go, and Merchants get to leverage their cash on hand, while benefiting from the increased foot traffic.
Philip, thank you writing this article so long ago! We are making it happen….
We welcome anyone who would like to join our Beta Test. Click here, leave your email in a PM and become part of the solution! https://www.facebook.com/SPAREatm?ref=hl