Revenue Recognition

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

(3) Revenue Recognition

Disaggregated Revenues

The following tables detail the revenues of the Company’s reportable segments disaggregated by financial statement line and component:

	Three Months Ended June 30, 2020
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	$	63,004	$	17,472	$	8,343	$	—	$	88,819
Interchange revenues	27,785		28,366		594		—		56,745
Bank-branding and surcharge-free network revenues	52,474		358		—		—		52,832
Managed services and processing revenues	21,794		892		3,156		(1,414)		24,428
Total ATM operating revenues	165,057		47,088		12,093		(1,414)		222,824
ATM product sales and other revenues	8,982		1,304		82		—		10,368
Total revenues	$	174,039	$	48,392	$	12,175	$	(1,414)	$	233,192

	Three Months Ended June 30, 2019
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	$	88,234	$	44,427	$	19,776	$	—	$	152,437
Interchange revenues	34,286		54,423		1,198		—		89,907
Bank-branding and surcharge-free network revenues	48,538		483		—		—		49,021
Managed services and processing revenues	28,478		2,168		3,752		(2,682)		31,716
Total ATM operating revenues	199,536		101,501		24,726		(2,682)		323,081
ATM product sales and other revenues	15,679		1,969		92		—		17,740
Total revenues	$	215,215	$	103,470	$	24,818	$	(2,682)	$	340,821

	Six Months Ended June 30, 2020
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	$	143,239	$	50,068	$	24,288	$	—	$	217,595
Interchange revenues	59,395		73,363		1,467		—		134,225
Bank-branding and surcharge-free network revenues	106,242		705		—		—		106,947
Managed services and processing revenues	49,422		2,910		6,645		(3,066)		55,911
Total ATM operating revenues	358,298		127,046		32,400		(3,066)		514,678
ATM product sales and other revenues	21,738		3,246		132		—		25,116
Total revenues	$	380,036	$	130,292	$	32,532	$	(3,066)	$	539,794

	Six Months Ended June 30, 2019
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	$	173,344	$	75,472	$	40,444	$	—	$	289,260
Interchange revenues	68,665		109,731		2,501		—		180,897
Bank-branding and surcharge-free network revenues	94,411		483		—		—		94,894
Managed services and processing revenues	54,162		4,493		7,572		(5,595)		60,632
Total ATM operating revenues	390,582		190,179		50,517		(5,595)		625,683
ATM product sales and other revenues	28,881		4,216		311		—		33,408
Total revenues	$	419,463	$	194,395	$	50,828	$	(5,595)	$	659,091

Revenue is recognized when obligations under the terms of a contract with a customer are satisfied. Revenue is recorded in ATM operating revenues and ATM product sales and other revenues line items in the Consolidated Statements of Operations.

ATM operating revenues are recognized daily as the associated transactions are processed or monthly on a per ATM or per cardholder basis. When customer contracts provide for up-front fees that do not pertain to a distinct performance obligation, the fees are recognized over the term of the underlying agreement on a straight-line basis. ATM product sales and other revenues are recognized when the related performance obligations are fulfilled upon transfer of control of goods or services to the customer.

ATM operating revenues. The Company presents revenues from automated consumer financial services, bank-branding and surcharge-free network offerings, managed services and other services in the ATM operating revenues line in the Consolidated Statements of Operations. The Company’s ATM operating revenues consist of the following:

•Surcharge revenue. Surcharge revenues are received in the form of a fee paid by a cardholder who has made a cash withdrawal from an ATM. Surcharge fees can vary widely based on the location of the ATM and the nature of the contracts negotiated with merchants. In the U.S. and Canada, the Company does not receive surcharge fees from cardholders whose financial institutions participate in a surcharge-free network or have branded a location; instead, the Company receives interchange and bank-branding or surcharge-free network-branding revenues, which are discussed below. For certain ATMs, primarily those owned and operated by merchants, the Company does not receive any portion of the surcharge but rather the entire surcharge fee is earned by the merchant. In the U.K., ATM deployers operate their ATMs on either a free-to-use (surcharge-free) or a pay-to-use (surcharge) basis. On free-to-use ATMs in the U.K., the Company earns interchange revenue on withdrawal and certain other transactions. These fees are paid by the cardholder’s financial institution. On pay-to-use ATMs in the U.K., the Company only earns a surcharge fee paid by the cardholder on withdrawal transactions and interchange is only paid by the cardholder’s financial institution on other non-withdrawal transaction types. The Company earns both surcharge and interchange in Spain. In Germany, Australia, and Mexico, the Company collects surcharge fees on withdrawal transactions but generally does not receive interchange revenue. In South Africa, the Company generally earns interchange revenues, which varies by transaction type and customer arrangement. Surcharge revenues, as described above, are recognized daily as the associated transactions are processed.

•Interchange revenue. An interchange fee is a fee paid by the cardholder’s financial institution for its customer’s use of an ATM that is owned by another operator and for the fee the EFT network charges to transmit data between the ATM and the cardholder’s financial institution. The Company typically receives a majority of the interchange fee paid by the cardholder’s financial institution, net of the amount retained by the EFT network, and recognizes the net amount received from the network as revenue. In some markets in which the Company operates, interchange fees are earned not only on cash withdrawal transactions but also on other ATM transactions, including balance inquiries and balance transfers. Interchange revenues are subject to various arrangements and are recognized daily as the associated transactions are processed.

•Bank-branding and surcharge-free network revenues. Under a bank-branding arrangement, ATMs that are Company-owned and operated are branded with the logo of the branding financial institution. In exchange for a fee paid by the financial institution, the financial institution’s customers gain access to use these bank-branded ATMs without paying a surcharge fee. Under the Company’s Allpoint surcharge-free network, financial institutions that participate pay a fixed monthly fee per cardholder and/or a fixed fee per transaction so that cardholders gain surcharge-free access to the Company's large network of ATMs. Bank-branding and surcharge-free network revenues are generally recognized monthly on a per ATM or per cardholder basis. Similarly, transaction-based fee arrangements are recognized daily or monthly as they occur. Any up-front fees associated with these arrangements are recognized ratably over the life of the arrangement.

•Managed services and processing revenues. Under managed service agreements, the Company provides various forms of ATM-related services, including monitoring, maintenance, cash management, cash delivery, customer service, on-screen advertising, processing and other services to merchants, financial institutions, and third-party ATM operators. Under processing arrangements, the Company provides transaction processing services to merchants, financial institutions, and third-party operators. Under managed services and processing arrangements, surcharge and interchange fees are generally earned by the customer and the Company typically receives a fixed fee per transaction and/or a periodic management fee per ATM in return for providing the agreed-upon operating services. The managed services and processing fees are recognized as the related services are provided to the customers.

The Company’s bank-branding, surcharge-free network and managed services arrangements result in the Company providing a series of distinct services that have similar patterns of transfer to the customer. As a result, these arrangements create performance obligations that are satisfied over-time (generally 3-5 years) for which the Company has a right to consideration that corresponds directly with the value of the Company’s performance completed to date. In conjunction with these arrangements, the Company recognizes revenue in the amount that it has a right to receive. Variable consideration may exist in these arrangements and is recognized only to the extent a significant reversal is not probable.

ATM product sales and other revenues. The Company presents revenues from other product sales and services in the ATM product sales and other revenues line in the Consolidated Statements of Operations. The Company earns revenues from the sale of ATMs and ATM-related equipment as well as the delivery of other non-transaction-based services. Revenues related to these activities are recognized when ownership of the equipment is transferred to the customer and the Company has completed all required installation and set-up procedures. With respect to the sale of ATMs to Value-Added-Resellers (“VARs”), the Company recognizes revenues related to such sales when ownership of the equipment is transferred to the VAR.

Due to the transactional nature of the Company’s revenue, there are no significant judgments that affect the determination of the amount and timing of its revenues.

Contract Balances

As of June 30, 2020, the Company has recognized no significant contract assets. Contract liabilities totaled $8.2 million and $9.0 million at June 30, 2020 and December 31, 2019, respectively. These amounts represent deferred revenues for advance consideration received primarily in relation to bank-branding and surcharge-free network arrangements. The revenue recognized during the three and six months ended June 30, 2020 and 2019 on previously deferred revenues was not significant. The Company expects to recognize the revenue associated with its contract liabilities ratably over various periods extending over the next 36 months. During the three and six months ended June 30, 2020, the Company did not recognize any significant impairment losses related to its contract assets.

Contract Acquisition Cost

The Company expects that the incremental commissions paid to sales personnel, together with other associated costs, are recoverable, and therefore, the Company capitalizes these amounts as deferred contract acquisition costs. Deferred contract acquisition costs totaled $6.8 million and $7.5 million at June 30, 2020 and December 31, 2019, respectively. Sales commissions capitalized are generally amortized over a 4-5 year period corresponding with the related agreements. Similarly, the costs incurred to fulfill a contract, primarily consisting of prepaid merchant commissions and other consideration paid or provided to merchant partners, are capitalized and recognized over the duration of the related contract. The Company does not capitalize the costs of obtaining a contract if the associated contract is one year or less.