STRATEGIC PARTNERS
Move beyond the 7-Eleven/NCR-driven Vcom project, and you will find other companies seeking a toehold in the kiosk-ATM convergence market.
August 11, 2002
Convergence in one form or another between the ATM and kiosk industries has long been anticipated. ATMs offer convenience and the kind of customer loyalty/sense of security that comes with ubiquity; the kiosk industry is much younger, but offers a new range of possibilities.
The efforts of 7-Eleven (NYSE:SE), NCR Corp. (NYSE:NCR), and various partners to bring ATM-kiosk convergence to life with the Vcom initiative is one project that has attracted the watchful eye of industry officials in both sectors.
But the Vcom project, which is expected to expand from a pilot test at 94 locations in Florida and Texas to possibly 3,500 units by the end of 2003 (See story: Vcom = more units, more functionality), is not the only one out there.
Some of the Vcom partners say they are close to finalizing agreements with other deployers to offer their services through ATMs or, as in Western Union's case, are launching deployment programs of their own.
New entry
While Vcom has become the standard by which all advanced functionality projects are measured, Western Union has introduced its own ATM/kiosk hybrid which it calls ACMs, or automated cashier machines. Western Union, which is owned by First Data Corp., last December partnered with Global Cash Access (GCA), another First Data subsidiary, to introduce five of the terminals, which offer check cashing, money transfer and money orders in addition to standard ATM transactions.
Jay Giesen, Western Union's senior vice president of alternative distribution, said initial results from these machines, which are located at four HEB grocery stores and one Kmart in south Texas, have been "extremely positive," so much so that the two companies will roll out at an additional 20 locations in Phoenix and Las Vegas next month. New services such as bill payment also will be added, Giesen said.
The business case
Like the Vcoms, the ACMs feature cash acceptors so that transactions can be conducted with or without bank cards.
"We spent a lot of time trying to come up with the right solution." Jay Giesen |
For users who pay for transactions with cash, any change is issued as a money order. "We spent a lot of time trying to come up with the right solution" for change, Giesen said, noting that eventually change may be placed either on a stored value card or in a "virtual account" that users could access later.
GCA owns and manages the terminals and provides the check cashing and back-office support, while Western Union provides the money transfer and money order services. The two companies pay rental fees and/or share transaction revenues with retailers, Giesen said.
All of the functionalities are linked, Giesen said, so that users can cash a check, purchase a money order and transfer funds, all in a single transaction.
Giesen said Western Union believes the ACMs will serve as both complements to its existing agent locations and as new distribution points at sites that cannot support traditional Western Union outlets. The ACMs are a "natural evolution" for many of Western Union's retail partners who want to streamline and automate these transactions, he said.
Exit interviews with users showed that many of them preferred the privacy and added convenience of conducting the transactions at the kiosk, Giesen said. In addition, all of the transactions are currently available in English and Spanish, with the capability of adding other languages.
The technical side
Transaction software developer Infonox provides a platform that supplies switching, routing, monitoring, reconciliation and settlement capabilities for the ACMs. Infonox chief executive officer Safwan Shah said the use of the inclusive platform makes it quicker and easier to add new functionality by eliminating some of the challenges associated with working with multiple vendors and software licenses.
"The value proposition is extraordinarily simple," Shah said. "You don't have to go to three different vendors and talk about integration."
Infonox also provides a feature called Active Verifier that is used during the check cashing enrollment process to help identify users, Shah said. The user's driver's license or other photo ID is scanned and uploaded into the back-end system where it is compared with a real-time photograph taken by a camera at the machine.
"We are simulating a bank teller environment where the teller can look at the person's face and their ID at the same time," Shah said, thus reducing the potential for fraud.
