Cash King – Steven Kark
At Lunch with the FM - Linda Stafford with ATM Solutions founder Steven Kark at Montego Bay, Nelson Mandela Square, Sandton
It's gratifying for a journalist to hear that the success of a young entrepreneur can be traced to an article he read in a business magazine.
In Steven Kark's case, it was the US's Forbes that changed the course of his career - and made him something of a hotshot. Not that he behaves like one.
Instead, Kark (32), though ever alert for a fresh opportunity, comes across as earnest, low-key and hard-working. This despite the fact that his reading habit has spawned a logistically complex, if seemingly simple, business: ATM Solutions, SA's largest deployer of off-premises automated teller machines, the 2003 winner of the SA Non-Listed Company Awards.
Today it has close on 3 000 ATMs and a 40% share of a market dominated by banking's Big Four. And the money that flows through its network is more than R1bn/month.
ATM Solutions employs 200 people, has five branches and 13 service centres, and runs its cash-in-transit operation out of 32 depots.
"As you can imagine, we also have to maintain a full-time security department," says Kark. "Thieves don't only try to steal cardholder information from our ATMs. They also hack and saw them and try to carry them away in vehicles."
We meet at Montego Bay largely because it specialises in seafood - Kark keeps kosher but enjoys a cappuccino or two (dairy products can be mixed with fish but not meat in the Jewish faith).
Though the kingklip dishes we choose are good to look at - they come with mounds of brightly coloured vegetables - they are less so to eat. The creamed spinach, ratatouille and rice taste tinny from rewarming; only the butternut is freshly cooked, as is the fish.
Kark is amusing in describing his relationship with the banks: "We're in what I call co-opetion', because we co-operate as well as compete with them." He pauses before being uncharacteristically sarcastic: "As you can imagine, it's a thrill a minute."
Kark spotted the Forbes article in 1999. "It described the success of three chaps who owned the largest ATM company in the US," he says. "I wrote to them to ask whether they were interested in expanding internationally and, lo and behold, they came back to me. And though they weren't interested in supplying me, their ATM machine manufacturer, Triton, was. So I flew there and managed to secure a distributorship."
However, since the hardware is only a small part of the ATM business, Kark's next hurdle - finding a bank to sponsor his enterprise into the national ATM switch - was harder to clear.
"The Big Four weren't interested," says Kark, "even though my partner, Rowan Swartz, and I were offering to give their brands more exposure and provide a service to their customers at a fraction of the usual cost."
Eventually, though, Saambou came to the party. "It had plenty of cardholders but relatively few ATMs, and thought the deal we were offering was great. So in early 2000 we rolled out the first 23 machines we had bought." Though Swartz and Kark had provided some capital, the rest, says Kark, came from "friends, family and fools".
Of course Saambou went to the wall in early 2002, but in the intervening period ATM Solutions had built up a network of 600 machines - a sign of pent-up demand from retailers, according to Kark. At that time, there were plenty of Big Four ATMs in metropolitan areas, but few in further-flung places. And though in the US there was hardly a petrol station, convenience store or supermarket that didn't have an ATM - it was viewed as a competitive disadvantage not to have one - this was a relatively new concept in SA.
"The thinking now is that if you have an ATM, the chances are that when someone uses it in your store a good portion of the money will find its way into your till," says Kark. "And we have a simple deal with retailers: they pay us a fee and every time someone uses their machine, we pay them a rebate. "
Our strategy is to bring banking closer to the people, to where they live, work and shop," he adds.
Though Saambou's failure was hair-raising for Kark and his team, it wasn't long before they did the deal with Absa that ATM Solutions still has today. Recently, it also began supplying machines directly to the Big Four. Though Swartz no longer plays an executive role, Kark has gone on to found two related businesses: a credit and debit card payment system called EFTPOS (for "electronic funds transfer point of sale"); and DrawCard, through which it issues and processes stored-value gift cards and Visa debit and credit cards to a number of blue-chip retailers. The holding company, of which Kark is also CEO, is the Kanderlane Group.
Kark was brought up in Johannesburg , the youngest of four sons his mother had to raise after their father died at a relatively early age. He attended Highlands North boys High and Wits, where he completed a BCom in finance. He worked for a luggage company - now listed as Brandco - for five years, eventually becoming a director, before going it alone. When Kark isn't on one of his six-weekly overseas trips, he keeps fit by boxing twice a week at a gym. His weekend quality time with his wife, Margie, and one-year-old son Aaron is practically prescribed by the fact that he observes the Sabbath from sunset on Friday to sunset on Saturday. Not that this stops him from reading business magazines.
"My interest in business is almost morbid," he says a trifle shamefacedly.