Article

Bill-payment kiosks are not extinct

Even with the onset of mobile bill-payment options, the kiosk still has a place serving the underbanked.

April 1, 2013 by Natalie Gagliordi — Editor of KioskMarketplace.com, Networld Media Group

More than one in four households in the U.S. are either unbanked or underbanked, according to a survey by the Federal Deposit Insurance Corporation. Because these households conduct some or all of their financial transactions outside of the mainstream banking system, they represent a key component to the relevancy of the bill-payment kiosk.

But with the rise of mobile bill-payment options, how long can the kiosk survive? According to Rob Goehring, chief marketing officer at the bill-payment processing platform TIO Networks Corp., the kiosk has a harmonious existence with its mobile counterpart — for now.

"We see them [kiosks and mobile] being complements, but we do see mobile taking over everything in the future," Goehring said, adding that TIO continues to see a high demand for bill-payment kiosks.

Recent news from TIO confirms the complementary mobile/kiosk relationship. Last week, the company announced that it surpassed 1 million transactions across its Wallet-based mobile and kiosk platforms and that TIO Wallet was introduced into a test market of TIO's network of bill-payment kiosks. As the trial expands, TIO Wallet customers will be able to load funds on to their account via the kiosk.

Goehring described two location-based use cases that contribute to the bill-payment kiosk's relevancy. First, a utility bill pay office traditionally looks to deploy a kiosk for greater customer convenience. In these environments, Goehring said it's common for the kiosk to trump an actual employee, with lines forming behind the kiosk rather than the customer service desk.

Another common environment where the bill-payment kiosk thrives is the convenience store. These locations cater to the underbanked consumer who tends to work later than normal business hours and needs access to extended financial services at odd hours.

"Large billing entities want to take the pressure off of their office, so they like having a network of bill-payment kiosks in their areas," Goehring said.

Interestingly, the underbanked's access to mobile and smartphones is four percent greater than the average American. This is the crucial element that will eventually tip the scales in favor of more mobile bill-payment usage, Goehring said.

"When we look at the overlay of mobile, underbanked citizens are using mobile phones at a faster rate than others," he said. "They don't tend to have 24-hour Internet access, so the phone has become a lifeline for them. But they are restrained in their ability to electronify their cash."

These people often use prepaid debit cards, so for them the kiosk is an attractive option, Goehring said. They can go to a bill-payment kiosk and load cash into their account and have those funds appear on their phone immediately, allowing them to pay bills from a stored amount in the cloud.

Adding to the strength and relevance of the bill-payment kiosk is the fact that companies are still putting new offerings out in the market, like last week's introduction of the PayTeller kiosk by Florida-based Payteller LLC. The kiosk began rolling out in Florida, with plans to expand into other heavily underbanked markets in Michigan, Texas and California.

The Payteller allows retailers to offer their customers full-scale financial services, such as bill-payment and mobile top-up, as well as the ability to load funds on to MasterCard and Visa prepaid debit cards.

"I am delighted that the Payteller will help consumers save time and money," said Jeff Foster, CEO of Payteller LLC, in last week's announcement. "Unfortunately, we live in a society where the highest fees for financial services are charged to those who can least afford it. Our kiosks provide these services less expensively and with a level of convenience currently unmatched for underserved consumers, while improving traffic flow and bottom line profits for the retailers who install them."

With the continued introduction of bill-payment kiosk options like TIO's and PayTeller's, and a growing population in need of such services, it seems that for the time being, the kiosk is safe from extinction.

"Way down the road you can certainly envision a world where the consumers' need for cash will be less," Goehring said. "People are using our kiosks and they like the experience, but they are slowly moving into a mobile world."

Read more about bill-payment kiosks.