Article

Out of ATMs, into kiosks

Losing 35 ATMs in the Sept. 11 terrorist attacks helped John Bradshaw decide to get out of the ATM business and into the kiosk business as one of the first to sign up under Info Touch's joint investment opportunity program.

October 20, 2004

As competition in the ATM market began to increase, John Bradshaw said the revenue stream of his ATM business kept getting smaller.

Then came Sept. 11, 2001.

Bradshaw was unfortunate enough to have 35 ATMs operating in and around the World Trade Center in New York. His company, ATM National Services, lost 60 percent of its revenue instantly. Based in Tampa, Fla., Bradshaw said he took a $1 million loss. He's still working to collect on insurance claims, he said.

As a result, Bradshaw, who said he had been seeking a way out of the ATM business, dissolved ATM National Services.

"That was just the straw that broke the camel's back to get out of the ATM business," Bradshaw said.

In the weeks and months prior to the attacks, Bradshaw had been seeking alternative business opportunities. One was electronic kiosks. He said he had begun to study the kiosk market when he contacted Info Touch Technologies Corp. in Canada.

His timing was impeccable. Info Touch was seeking business partners for a new program called the Joint Investment Opportunity program, or JIO. Bradshaw has since become an agent for Info Touch, helping the company find individuals who invest in kiosks installed at certain retail and military outlets, then share in the revenue from them. Bradshaw started a new company, American Kiosks Inc., based in his Dunedin, Fla., home, and already has signed several investors in the program. "We sell kiosks as a business opportunity," said Bradshaw, who plans and presents the kiosk opportunity to small groups.

The kiosks perform a variety of functions, and Bradshaw said he's pleased with the initial response.

"Once they see them, they love them," Bradshaw said. "It has so many revenue streams."

According to Joseph Nakhla, Info Touch's chief marketing officer, the kiosks generate revenue in three ways. One is through pay-per-use, in which customers pay to use the kiosks for videoconferencing, video e-mail, mapping applications, even Web browsing. Second, transaction-based revenue is realized when customers use the kiosks for bill payments or product purchases.

A third revenue stream comes through Info Touch's advertising subsidiary, Clicks and Mortar Media Inc., which sells advertising on the kiosks and sends a portion of revenue to the kiosk investor.

"Our goal is to try to provide them with a return on investment within two or three years," Nakhla said.

The price of the kiosks can range between $7,000 and $17,000, depending on the options added to the kiosk, including the number of servers and additional screens attached to the main terminal, Nakhla said.

Info Touch generates revenues from machine sales and a percentage of revenue earned from services on the network, Nakhla said. Services include online bill payment, interactive mapping and directions, coupons, Internet payphone (VOIP), public and private video and photo e-mail and general purpose Web and e-mail access.

Info Touch has multiple channels in which it deploys kiosks, Nakhla said. Bradshaw markets the opportunity through investment meetings..

"Info Touch has developed an attractive formula for an investor that is ROI (return on investment)-centric," Nakhla said.

Formed in 1997, Info Touch is publicly traded on the Toronto Venture Exchange Market. The company develops software, including the SurfNet technology platform for public access computers.

The joint investor program is being used to accelerate deployments in convenience stores, including Info Touch's arrangement with Circle K. All of the sites in which investors can participate are selected by Info Touch, Nakhla said.

Info Touch has tested the kiosks in 35 Phoenix-area Circle K stores, and expects to expand the program with an additional 500 kiosk installations in the southwest, according to a recent news release sent jointly by Info Touch and Circle K.

Info Touch has also supplied 250 kiosk machines to U.S. military bases around the world, with many more scheduled in the next two years, Nakhla said.

Bradshaw said the greatest appeal to soldiers is the Internet and e-mail capability that allows them to communicate with family and friends.

Bradshaw's former company established itself in 1994 and once owned more than 125 ATM machines in different locales across the country, including a bevy of them in and around the World Trade Center complex.

Even before the terrorist attacks, Bradshaw said his company was considering getting out of the ATM business because although the company was still making money on ATMs, its earnings were getting smaller. He compared ATMs to pay telephones.

"Pay telephones are suffering because of the cell phone industry," Bradshaw said, adding that the increasing number of ATMs that began popping up resulted in fewer transactions per machine. ATM owners make money on transaction fees and in some cases advertising, he said.

Unlike an ATM machine, kiosks have multiple revenue streams, and they are easy to use, Bradshaw said.

Bradshaw said he expects the Info Touch kiosks to soon begin popping up in airports and shopping malls.

"They are going to look at each market," Bradshaw said.

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