Article

Papelaco broadening its scope

Portuguese kiosk/ATM manufacturer Papelaco sets sights on U.S., concentrates on financial kiosks

April 10, 2002 by

When Papelaco got its start in Portugal in 1970, the business sold paper and office machines. Thirty years later, Papelaco's eight separate entities include PDSL-Papelaco Equipamentos Para Teletramento de Informação: a kiosk and ATM manufacturer.

Papelaco made a name for itself in the ATM game in the last decade. With just three years in the kiosk trade under its belt, Papelaco is still a relatively new player. Nevertheless, the company is unshakably confident and has plans to take a bold step away from home.

Coming to America?

Papelaco has yet to enter America's kiosk and ATM markets, distributing its products in Portugal, Spain, Africa, Europe and South America. But the company is attempting to establish a business partnership in the United States, said Papelaco Sales Director Ricardo Medina, who would not elaborate on his American business plan.

Papelaco's focus in the kiosk business is on financial transaction units.

"There are many companies providing an Internet access point, but we are not competing in that particular market," Medina said. "We understand that the kiosk is an expansion of an ATM, providing the interface to payment systems and implementing security features."

Financial transaction kiosks were a perfect fit for Papelaco because the ingredients were already there, Medina said.

"We have all the technology to do the kiosks, making use of the security features and the interface with payment systems," he said. "We try to concentrate on what we can do very well."

Michelle Bone, an analyst with England's division of the independent market research firm Frost & Sullivan, agrees.

"I think its probably better that these types of companies stick to what they know," Bone said.

Although Papelaco is not talking publicly about its future in America, Bone said establishing a partnership with an existing U.S.-based manufacturer would help Papelaco keep its costs down. Generally, she said, kiosk prices are lower in the U.S. than abroad.

Although Medina cites a lukewarm reception to kiosks in Portugal, Bone contends that the country has done well in introducing kiosks. Government initiatives have helped establish kiosks in various communities, spreading the word on local events and bringing electronic bill paying capabilities to people outside major cities, Bone said.

Papelaco's multifunction kiosks come in several models powered by Windows NT software.

The DV-2613 kiosk features a magnetic card and chip reader, touchscreen, printer, bar code scanner and videophone. The DV-3613 also has a printer and barcode scanner but sets itself apart from its sibling with a color LCD, videoconference facilities, an alphanumeric keyboard and trackball.

Add it up

If the international interactive kiosk forecast by Frost & Sullivan is any indication, Papelaco's financial kiosks may have a bright future.

The research firm predicted banking and finance kiosks would account for 23.4 percent of the revenue generated from kiosk sales worldwide last year. Only retail kiosks, which the firm predicts will have a market revenue share of 47.4 percent, are ranked higher.

"If you want more information, you can go and talk to somebody. But if you want quick information, then this type of (kiosk) is perfect," Bone said. "You go there, choose what you want, get the information without getting tied into talking to somebody and perhaps committing yourself to something that you don't want to do. From that point of view, financial kiosks would be accepted in the banking environment or elsewhere."

Frost & Sullivan foresees that revenue from banking and finance kiosks will peak at 26.9 percent in 2002 and fall to 23 percent by 2006, occupying a major portion of the world market. The Frost & Sullivan forecast estimates that banking and finance kiosks will catch retail kiosks in market share by 2006. By then, however, the new king of the hill, will be telecom kiosks with a revenue share of 42.7 percent.

Best of both worlds

In Portugal, Medina said, about half of the business conducted on Papelaco ATMs is cashless transactions such as train ticket purchases, bill payments and other services.

Medina said his country isn't completely sold on kiosks, but predicted that a new Papelaco product could change that.

To educate the public, Papelaco has developed Kiosk@ATM - a kiosk and ATM hybrid designed to attract those who are unfamiliar with kiosks. In November, Papelaco unveiled it product in the U.S. at the Bank Administration Institute's Retail Delivery conference in New Orleans. A release date for the product has not been determined.

With Kiosk@ATM, banks can provide video conferencing, Internet access with a Web browser limited to the bank site or the stock exchange. The bank can determine other Web sites it finds interesting and allow access to them, Medina said.

Medina said his product could help customers in other ways For the customer looking for car insurance information, for example, "Why not send him an e-mail or display a message about what the rate for a car loan is? There is quite a lot of work that can be done."

Don't think Papelaco hasn't thought of how Web surfing could anger some ATM users that just need cash.

"During peak hours, Internet access can be disabled remotely," Medina said. "But perhaps in the middle of the afternoon nobody's using the ATM. Why not provide a new service and revenue stream?"