Blog

Reverse ATMs taking on over-the-counter activities

February 9, 2012

I've just got back from the Middle East, where I've been chewing the fat with my good friend Robert Holt from MBME, based in Dubai.

We both agreed that there are currently huge opportunities for companies offering bill-payment kiosk services a.k.a reverse ATMs. Over the past year or so, we have seen a large increase of activity in this space as companies spot the gap in the market and rush to fill the vacuum. However, everyone knows that nothing can exist in a vacuum, right? Personally, I'm not so sure... this business space appears to be real and set for spectacular growth.

The success of bill payment ventures depends largely on location. In internet savvy societies, such as the U.S., Europe or Australia, the notion of paying your bills on a machine is certainly not a mainstream method. However, even in these societies there is still a large contingency of under-banked people, who don't automatically jump on the Internet to pay their bills when they get their pay checks. The need for this provision expands the further you move away from "credit-card" societies.

For those who don't have a bank account, what options are there for paying your bills? Often referred to as the "un-banked" these people are without the means to pay by standing order, direct debit or credit card and have a genuine need for bill payment services. This is where a reverse ATM business will really take off -- a captive audience with a genuine need and little other option. Even though bill payment providers can charge a $2-fee for each transaction (passed onto the end user), there is still take-up on the service. The benefit to the customer is that they can pay off their utilities at the last minute and in convenient places, ensuring that they avoid disconnection for non-payment.

Had you asked Robert or I whether we could foresee this opportunity two years ago, we would both have said no, because back then it was a non-existent industry. I believe that bill-payment kiosks will remain popular indefinitely for large portions of society and particularly in countries where infrastructure is still under-developed. Cell phone payment systems may also offer certain opportunities, but only as part of an overall offer that consumers will require.