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Info Touch's Shahbazi discusses how to serve the cash-preferred

In a presentation chock-full of statistics and new insights, Hamed Shahbazi, chief executive officer of Info Touch Technologies, addressed the audience at The Self-Service & Kiosk Show on how the cash-preferred demographic is changing, and why some financial services applications that aim to serve them are more successful than others.

March 5, 2006 by James Bickers — Editor, Networld Alliance

Attendees who sat in on Hamed Shahbazi's presentation at The Self-Service & Kiosk Show, Feb. 14, were given more than just a cursory look at unbanked and underbanked segments of the population. They were given a comprehensive education on who is unbanked, what they want from their service providers, and why it is so important to understand them as human beings before trying to sell them something.

Shahbazi is chief executive officer of Info Touch Technologies, whose TIO bill-payment system processed more than 260,000 bill payments - valued at more than $17 million - in the past 30 days.

Shahbazi laid out statistics that point to the unexpectedly high number of undocumented immigrants holding U.S. jobs - 12 to 15 million, which represents 8 percent of all jobs in the country. Unauthorized immigrants may be as high as 20 million, more than twice the 9 million estimated by the Census Bureau.

Many of those immigrants are unbanked, largely because of issues of trust - Shahbazi noted that someone who is either in the country illegally or who has a family member that is isn't likely to give personal information to a bank, even if their credit would allow them to get an account.

But immigrants are not the only ones unbanked, not by a long shot. In the U.S., 9 million households - comprising 40 million individuals - do not have bank accounts. That means 15 percent of the country is officially unbanked.

And then there is the "underbanked," that group of people that have bank accounts but, for reasons all their own, prefer to use services like bill payment and prepaid. Shahbazi pointed out that 53 percent of TIO bill-payment customers have no bank account, which means 47 percent do, but would rather use the kiosk to pay their bills.

Tio, Shahbazi noted, is Spanish for "uncle, the most respected role in the Hispanic family Â… someone who puts his arm around you and shows you the right direction, someone who won't steer you wrong."

Along those lines, he was quick to point out that anyone hoping to serve the Hispanic market had better do their homework, and not just about markets and purchasing trends but about culture and family.

"If you are interested in serving this demographic, don't think about monetizing them as your first thought," he said. "Think about how you can improve the quality of their life as your first thought, and then think about monetizing it. Unless you understand their world, you won't be able to monetize it. What they really want is to feel secure."

It's a big market, too: The Hispanic shopper will represent $1 trillion to the U.S. economy by 2008, Shahbazi said. And they're particularly valuable to c-store operators, as Hispanic shoppers historically spend three times more money at convenience retail than other demographic groups.

One of the Shahbazi's more compelling stories was of his conversation with a cab driver, a Hispanic gentleman who explained that while he used a prepaid cellular phone as his primary home phone, he also felt compelled to pay for a Qwest home line, in the hopes of rebuilding his credit.

Sadly, Shahbazi noted, Qwest doesn't report to credit bureaus when you make a payment on time - only when you don't. So this man's efforts to rebuild his credit by paying twice as much as he should for phone service wasn't doing him any good.

To that end, Shahbazi explained his desire to see individuals use the TIO system to rebuild their credit. In the coming months, he said TIO will be enabled to report to credit bureaus when patrons make a payment. This too stands to serve a large audience - there are an estimated 70 to 100 million credit-challenged individuals in the U.S.

[Editor's note: Info Touch Technologies became Tio Networks in April 2006.]

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