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  • Kiosk ISO paradigm: Business innovation with ‘reverse ATMs’


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The ISO business model proves that small and large entrepreneurs can compete on an equal footing. All it takes is innovation, reinvention, and replication of a successful business model. Many ATM network operators and independent sales organizations (ISOs) recognize new revenue opportunities with the placement of financial service kiosks next to existing ATMs. While for the past four decades Automatic Teller Machines (ATMs) have been ubiquitous and an essential part of daily banking services, financial service kiosks now offer new additional revenue opportunities. The kiosk ISO paradigm empowers ATM network operators to tap into the growing 'cash preferred' consumer market.

Financial service kiosks function as reverse ATMs that enable cash-preferred consumers to securely and conveniently pay their wireless, utility, cable and other bills in convenience stores, groceries and other retail locations. Consumers benefit from convenient access to expedited financial services in a safe and welcoming environment, and the availability of services in multiple languages (i.e., English and Spanish). Consumers also use these kiosks to reload their pre-paid debit cards. There is an average processing fee of $3 - $5 associated with each transaction. What experts have dubbed 'the next generation of ATMs' combines the best in technological breakthroughs with expedited processing of financial transactions and a sound business model.

The kiosk based ISO model is all about leveraging business opportunities with investment in, and operation of financial services kiosks to convert consumers' needs (for convenient access to cash based bill payment and financial transactions) to recurring revenue. In the process, ISOs partner with processors, such as TIO Networks, to deliver expedited bill payment services in neighborhoods with high concentrations of cash paying consumers. The success of this ISO paradigm depends on partnership with a processor capable of bringing a host of national and regional biller relationships into equation.

Among independent sales operators, there are many retailers who recognize revenue potentials of a kiosk-based ISO model. These retailers study market opportunities and the benefits of offering expedited financial services as an additional line of products and services. The placement of financial services kiosks often translates into a competitive edge, increased in-store foot traffic, and additional recurring revenue for retailers. Conventional financial institutions cannot meet the growing demands of unbanked and underbanked consumers for access to cash based financial services.

Market research indicates that more than 25.6 percent of U.S. households or approximately 60 million individuals are either unbanked or underbanked. An estimated 7.7 percent of U.S. households, approximately 9 million, are unbanked. These households do not have a checking or a savings account. Households with earnings below $30,000 account for at least 71 percent of unbanked households. There are approximately 23 million unbanked and underserved Hispanics in the U.S. (FDIC National Survey of Unbanked and Underbanked). By 2050, the Hispanics, the largest segment of unbanked and underbanked demographics, will constitute 25 percent of the US population (U.S. Census Bureau).

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