TIO expanding Best Buy billpay kiosk deployment

TIO Networks Corp.is about to double the number of its billpay kiosks deployed in Best Buy stores — and that could still be just the tip of the iceberg.

After rolling out about 40 kiosks in four markets in late 2009, TIO is set to double that first stage deployment over the next 90 days and bring its total to more than 80 kiosks in about nine or 10 markets, according to TIO chairman and CEO Hamed Shahbazi.

And the strategic partners are "very much so" looking into expanding TIO's presence to span the Best Buy universe, Shahbazi says.

"There's a lot of capital leveraged in order to do that, so there are different tactics that we're talking to Best Buy about, in order to affect a large part of their chain, so stay tuned on that," Shahbazi said in a recent phone interview. "But we feel very confident, and the early transaction results have been quite encouraging."

Best Buy is the United States' biggest big box retailer for consumer electronics, and the company has nearly 4,000 stores in North America, Europe and China, primarily under the Best Buy and The Phone House imprints.

That makes this a very big deal, even for TIO, a multichannel expedited bill payment processor serving the largest telecom, wireless, cable and utility bill issuers in North America with already more than 20,000 location endpoints to its processing network.

"It's a very material deployment for TIO," Shahbazi said.

Not surprisingly, attempts to contact the tight-lipped Best Buy for comment were unsuccessful.

The deal to work with Best Buy came about quickly and smoothly, Shahbazi says, with the two sides meeting and deploying within the same calendar year.

Calling Best Buy "a talented retailer, notwithstanding their size," Shahbazi says one of the most important factors for TIO was how successful Best Buy is at selling phones.

"They support pretty much every major carrier in the country, and it's been shown that anyone who sells phones has the ability to also provide bill payment services, because people like to pay bills where they acquired their phones; it's like a trusted feeling," he said. "And of course that's for those folks who make in-person bill payments, but there are still a lot of those people who do make in-person bill payments."

Even knowing that, and being confident that cellular phone and Best Buy card payments would likely do well at the kiosks, there were still surprises to be found in the initial deployment, Shahbazi says.

"Most surprising has been how well utility bill payments have done," he said. "And I guess we forget that Best Buy goes out and gets the best real estate it can possibly find, so it shouldn't come as a surprise I guess when you really think about how it's just so well positioned from a store perspective."

In addition to its prime real estate, though, Shahbazi says Best Buy's merchandise makes it a place people like to go to just check out the latest and greatest in technical gadgetry. Usually the billpay option helps make a retail location more of a destination, he says, but in this case the store already is a popular destination.

TIO is a widely spread multichannel billpay service provider now, and this strategic alliance should be a big shot in the company's kiosk arm, Shahbazi says. (It's likely already helping. TIO's Q2 financials, released today, show the company's U.S. transaction revenue is up 20 percent from Q2 of last year, and nearly 10 percent from Q1 2010.) And that shot in the arm could get very potent if the deployment goes on to go chain wide.

"There are different options, and it's something we continue to discuss with them," he said. "The discussions are moving forward, and I would say there's a lot of steam behind them as well. This is not a company that half-bakes anything. They're either in or they're out."