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Spark ATM Systems: Marc Sternberg

Even in well traded environments there is opportunity for innovation.

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Marc Sternberg

Spark ATM Systems had its genesis in a late-night need to draw cash. This led to an independent network of some 1 000 cash machines just a couple of years later. That’s despite the fact that operating ATMs in such an apparently mature market seems like a crazy idea.

Company founder and managing director Marc Sternberg, who had returned to South Africa from several years working in Sydney, explains that when he needed some money at a hotel, he assumed that there would be a cash machine readily available. “In Australia, there are ATMs everywhere. In bars, hotels, grocery stores – but I was laughed at when I asked, ‘Well, where is it’.” As he walked down the street to the nearest petrol station, he realised that opportunity was staring him in the face. “The penny dropped. Why should there not be an ATM in every place where there are 500 or more people?” As far as the traditional operators of ATM networks – the banks – are concerned, the reason for that is pretty simple. It’s a cost thing; an ATM has to pay for its presence and they are very expensive devices. Or are they?

New Business Model

Sternberg explains: “The model used by the banks is expensive. They have leased line or satellite connectivity and the hardware itself costs a bundle. Then there is the cost of cash replenishment. When you have Fidelity or Coin running around, you need very high volumes to make that site pay for itself.” His answer was to source far lower cost equipment and connectivity, which turned out to be readily available. But the real master stroke came in the cash replenishment model.

“Instead of a dedicated service, our sites operate in ‘cash rich’ environments. Pool halls, butcheries, pharmacies and pubs – anywhere there is a till which is taking a lot of cash. We partner with the proprietor, who earns a fee from each withdrawal. Now, instead of depositing his cash at the bank, which itself attracts a handsome fee, the proprietor puts his takings into the ATM and receives an electronic payment back into his bank account. When customers draw it out, they earn even more.”

The reception from banks has not been adverse, either, Sternberg says. “We play in a very different space, serving predominantly the lower value transactions of a couple of hundred Rand and niche areas where banks can’t justify an ATM of their own,” he explains, adding that his Spark ATMs cost approximately one tenth to purchase and operate compared to those of the banks.

Financing the Company

Like many entrepreneurs who have complete faith in their business ideas, Sternberg explains that he and partner, Russell Berman, funded and grew the business from their personal savings, reinvestment of profits and a rental-purchase structure for equipment finance. “Giving away equity means giving away control. We want to stay nimble and able to respond to the market needs very quickly,” he says.

Although he’s a CA, Sternberg has experience in the retail sector. Hence, the company is built on principles such as customer service and rapid response. “ATMs are all we do. The ATM is an asset for our retailers who host them, so we make sure that the machine is up and running, not only to serve the customer drawing cash, but also to serve the store owner where it is located.”

Expanding the Network

The opportunity for growth is considerable, Sternberg believes, while risk is minimal. “We’ve had very little vandalism and no incidences of ATM bombings, as our machines are located in high foot-traffic areas, very often under the nose of a store owner or operator. The machines add value to the businesses where they are located and to people who need cash.” Spark’s research indicates that in South Africa, there are presently some 200 to 250 ATMs per million people, while in Canada, Australia and Mexico, that number is closer to 1 000 machines per million. “We think there is headroom for that many machines in this country. And we intend to make sure that most of them will be Spark ATMs.”

Spark  ATM Systems
Player: Marc Sternberg
Est 2006
Contact
086 111 4751
www.sparkatm.co.za

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25 Of The Most Successful Business Ideas In South Africa

Find out who’s making waves in numerous industries and how they managed to differentiate themselves in local and international industries.

Nicole Crampton

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“Disruption is all about risk-taking, trusting your intuition, and rejecting the way things are supposed to be. Disruption goes way beyond advertising, it forces you to think about where you want your brand to go and how to get there,” says Richard Branson.

South Africa has its fair share of innovative and disruptive businesses taking both local and international industries by storm. From cutting edge space technology to reimagined logistics, and innovative business models, here are 25 of the most successful business ideas in South Africa:

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27 Of The Richest People In South Africa

Here are 27 of South Africa’s richest people, but how did they achieve this level of wealth? Find out here.

Nicole Crampton

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Learn the secrets of SA’s most successful business people, here is the list of the 27 richest people in South Africa:

In a world with growing entrepreneurship success stories, victory is often measured in terms of money. The feat of achieving a place on this list is, however, years of hard work, determination and persistence. “One has to set high standards… I can never be happy with mediocre performance,” advises Patrice Motsepe.

From the individuals that made the 27 of the richest people in South Africa list, actual entrepreneurs and self-made business people dominate the list; while those who inherited their fortunes have gone on to do even bigger and better things with their wealth. Over the years, some have slipped off the list, while others continue to climb higher and higher each year.

  1. Elisabeth Bradley
  2. Sharon Wapnick
  3. Bridgette Radebe
  4. Irene Charnley
  5. Wendy Ackerman
  6. Paul Harris
  7. Wendy Appelbaum
  8. Mark Shuttleworth
  9. Desmond Sacco
  10. Giovanni Ravazzotti
  11. Markus Jooste
  12. Gus Attridge
  13. Gerrit Thomas Ferreira
  14. Cyril Ramaphosa
  15. Adrian Gore
  16. Raymond Ackerman
  17. Michiel Le Roux
  18. Lauritz Dippenaar
  19. Jannie Mouton
  20. Stephen Saad
  21. Patrice Motsepe
  22. Allan Gray
  23. Koos Bekker
  24. Ivan Glasenberg
  25. Christoffel Wiese
  26. Johann Rupert
  27. Nicky Oppenheimer
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Watch List: 50 Top SA Black Entrepreneurs To Watch

South Africa needs more entrepreneurs to build businesses that can make a positive impact on the economy. These up-and-coming black entrepreneurs are showing how it can be done.

Nicole Crampton

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Early-stage South African entrepreneurial activity is at an all-time high of 11%, according to Global Entrepreneurship Monitor, and entrepreneurial intentions have also increased to 11.7%. With both activity and intentions growing significantly year-on-year, there are more businesses opening up around South Africa than ever before.

The increase in entrepreneurship has seen the rise of more black entrepreneurs across numerous sectors. From beauty brands to legal services and even tech start-ups, these are 50 top black entrepreneurs to watch:

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