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Get the edge when offering financial services

September 2, 2004

Americans are using prepaid services more than ever before. And C-store operators are cashing in by deploying kiosks solutions that offer prepaid services to the unbanked. This segment of the population, approximately 13 percent of American households, typically pays for services in cash.

This story and all the great free content on Kisok Marketplace is supported by: Info Touch Technologies Corp.

"With more than 5 percent of Caucasians and one-third of other ethnic citizens effectively bankless, the unbanked population represents a significant opportunity for prepaid service providers," said Imke Louis Mensah, ATLANTIC-ACM vice president and analyst covering the prepaid industry.

"Many C-stores are turning to financial services initiatives as a compelling revenue model," said Hamed Shahbazi, chairman and CEO of Info Touch Technologies, a provider of kiosk security and management software solutions.

C-store operators understand that the biggest service they provide is time. "What they are realizing is that kiosks that can handle multiple product categories and services on a self-service platform make a lot of sense because they have a small footprint and leverage time," Shahbazi said.

"Prepaid is now one of the fastest growing categories within the convenience store industry," said Joseph Nakhla, executive vice president of distribution for Info Touch Technologies. "What we have found is that many of the retailers are seeking a way to remove the whole prepaid experience from the cashier."

Francie Mendelsohn, president of Summit Research Associates, said, "There is an unbelievable number of people using ZapLink (Info Touch's multi-use e-services kiosk) each day, and each pays a $2 transaction fee. The revenue that directs into the stores and provider pockets is significant." The units pay for themselves in no time, she said.

The key is a steady stream of customers who gladly pay the service fee. "The unbanked population is used to paying service charges. Two bucks is nothing to them. They are just happy to be able to pay a utility bill at the last minute and know that the phone won't be shut off the next morning," said Mendelsohn.

While there are many reasons why prepaid has become popular over the past several years, customer demographics makes prepaid work well in the C-store environment.

"This includes ethnic groups that make a lot of calls back home. Long-distance carriers do not offer competitive rates," Nakhla said. "With prepaid they can find cards that target their specific ethnic group."

In addition to prepaid wireless and long distance, Info Touch e-services kiosks offer additional functions such as bill pay, Wi-Fi, money orders, money transfer, and other prepaid mobile content such as ring tones and games.

"Bill payment is our killer app across the board," Shahbazi said. "We are finding that programs like bill pay, money transfer, money order - these are quite well suited and continue to be strong applications along with the availability of prepaid."

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