Buying FCTI: the first move overseas (2012)

What transplanted, and what did not

The decision to acquire can be seen as reasonable on the materials available at the time. The domestic ATM network had finished covering the country, and growth was tied to the pace of convenience-store openings. The United States was the largest ATM market in the world, the group’s Seven-Eleven was there, and FCTI was already a counterparty. The grounds for believing the thing could be moved were all present. What had actually been working in Japan, however, was not “ATM operation” but a relationship supported by a circumstance particular to Japan — that partner financial institutions wanted to reduce ATMs of their own.

The model FCTI carried — owning the machines and setting the fee itself — takes its money directly from the user, and so is hit head-on when fewer people use cash. That the impairment came immediately after adding 8,000 machines shows that the assumption of building scale first and letting earnings catch up did not hold. That what the company began in the United States five years after the write-down was financial services other than ATMs suggests this business is still searching for an answer to the question of where, in the end, it earns.