Revenue Recognition

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Disaggregated Revenues

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

	Year Ended December 31, 2020
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	$	272,448	$	99,107	$	54,246	$	—	$	425,801
Interchange revenues	120,587		150,726		—		—		271,313
Bank-branding and surcharge-free network revenues	228,845		1,462		—		—		230,307
Managed services and processing revenues	95,571		7,027		16,706		(5,946)		113,358
Total ATM operating revenues	717,451		258,322		70,952		(5,946)		1,040,779
ATM product sales and other revenues	44,702		7,624		894		—		53,220
Total revenues	$	762,153	$	265,946	$	71,846	$	(5,946)	$	1,093,999

	Year Ended December 31, 2019
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	$	357,323	$	164,606	$	79,880	$	—	$	601,809
Interchange revenues	138,557		212,531		—		—		351,088
Bank-branding and surcharge-free network revenues	203,533		958		—		—		204,491
Managed services and processing revenues	104,542		9,996		19,672		(10,492)		123,718
Total ATM operating revenues	803,955		388,091		99,552		(10,492)		1,281,106
ATM product sales and other revenues	59,559		8,229		511		—		68,299
Total revenues	$	863,514	$	396,320	$	100,063	$	(10,492)	$	1,349,405

	Year Ended December 31, 2018
	(In thousands)
	North America		Europe & Africa		Australia & New Zealand		Eliminations		Consolidated
Surcharge revenues	$	364,580	$	120,906	$	90,110	$	—	$	575,596
Interchange revenues	143,803		268,871		—		—		412,674
Bank-branding and surcharge-free network revenues	179,760		—		—		—		179,760
Managed services and processing revenues	99,371		10,614		27,028		(12,113)		124,900
Total ATM operating revenues	787,514		400,391		117,138		(12,113)		1,292,930
ATM product sales and other revenues	42,665		9,379		269		—		52,313
Total revenues	$	830,179	$	409,770	$	117,407	$	(12,113)	$	1,345,243

As presented, certain prior year amounts have been reclassified to ensure consistency with the current year presentation and management's current views concerning the classification of revenues related to managed services and processing arrangements. The reclassified amounts previously presented as Managed services and processing revenues were reclassified as Surcharge revenues and Bank-branding and surcharge-free network revenues, respectively, in the North America segment, and amounts previously presented as Interchange revenues were reclassified as Managed services and processing revenues in the Europe & Africa and Australia & New Zealand segments. The Company determined that these reclassifications are not material to the previously reported financial statements and had no effect on the reported ATM operating revenues or ATM product sales and other revenues in the Consolidated Statements of Operations.

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

The Company presents revenues from automated consumer financial services, bank-branding, surcharge-free network offerings, managed services, and other services in the ATM operating revenues line in the Consolidated Statements of Operations. ATM operating revenues are recognized 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. 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. 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’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 merchant earns the entire surcharge fee. 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 revenue, 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 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 retail-based 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, except for transaction-based fee arrangements which are recognized daily 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 monthly service fee, fee per transaction, or fee per service provided 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 with 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 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. 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 VARs.

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 December 31, 2020, the Company has recognized no significant contract assets. Contract liabilities totaled $8.1 million and $9.0 million at December 31, 2020 and 2019, respectively. These amounts primarily represent advanced consideration received in association with bank-branding and surcharge-free network arrangements. The Company expects to recognize the revenue associated with its contract liabilities ratably over various periods generally extending over the next 36 months.

Contract Acquisition Costs

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 $6.5 million and $7.5 million as of December 31, 2020 and 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.

Practical Expedients and Other Disclosures 

On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers, using the modified retrospective adoption method for contracts that were not completed as of January 1, 2018. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening retained earnings. In order to adopt and subsequently apply the new revenue standard, the Company utilized various practical expedients. The Company elected not to re-examine contracts modified prior to its adoption using the modified retrospective adoption method and elected to utilize a portfolio approach to assess and apply the impact of the new revenue standard. Furthermore, the Company has elected not to disclose information about remaining performance obligations that have original expected durations of one year or less.