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MEI #1- Why You Should Integrate Bill Acceptors Into Your Kiosks

February 14, 2001

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Kiosk OEMs have an incredible opportunity to capitalize on a new, lucrative market: retail. Kiosks in the retail market already comprise nearly 57 percent of the world's kiosk industry, and that number is expected to grow as more retailers realize the tremendous revenue-generating and branding opportunities that retail kiosks offer. By 2006, retail kiosks are expected to mushroom into a $7.5 billion industry.

In-store, payment-accepting kiosks allow retailers to sell products without the expense of hiring extra salespeople or opening additional stores. Plus, kiosks provide customers with additional services like product reviews, information, and product location (i.e., aisle 2) within the store. Consumers can browse through the retailer's entire line of products - both within the store and within the retailer's complete database - customize products, place orders, pay for them, and arrange to have them shipped all on a kiosk.

Kiosks in retail - the interactive sales tool

The Internet has radically changed consumer expectations for customer service. Now, consumers demand more information, immediate availability, and greater convenience. To satisfy the "what-I-want, when-I-want-it" consumer demand in brick and mortar stores, retailers are operating electronic kiosks in their stores to provide the best of both worlds. What could be more ideal? Interactive, self-service kiosks interweave both marketing channels - the physical and the virtual - to give consumers the options, flexibility, and convenience they demand. Payment-accepting kiosks offer a virtual element, while maintaining the personal service and experience (i.e., the feel of the products, the unique environment) that only a physical store can give. Plus, electronic kiosks allow retailers to tap into that market of consumers without Internet access - approximately 30 percent of the population.

But, to really get the most out of retail kiosks, they must be capable of making transactions through credit cards, debit cards, and cash. Accepting cash is critical. According to the 1999 Nilson report, more than twice as many purchases are made with cash than credit cards and electronic payment systems combined. Plus, more than 28 percent of U.S. residents own neither a credit card nor a debit card. Although the use of non-cash payments is expected to rise in the future, the volume of cash used in retail transactions will continue to grow beyond 2005.

Furthermore, accepting cash allows retailers to provide payment flexibility that even an online store can't offer.

Cash- or bill-accepting kiosks are also in hot demand because they allow retailers to:

• extend exposure with synergistic branding through both virtual and physical marketing channels;


• boost sales without additional stores or employees and the associated costs;


• increase employee productivity with unattended, automated kiosks in stores;


• enhance customer satisfaction and loyalty with faster, more convenient service; and,


• generate more revenue with new sales portals beyond the physical
  store (i.e., additional retail kiosks in high-traffic areas - malls, hotels, airports, etc.).

Because of these and other benefits, forward-looking retailers - including many Fortune 500 companies - are already preparing for the future by integrating cash-accepting kiosks in stores.

But this is just the beginning.

The retail kiosk world is an open-ended marketplace for kiosk OEMs. As kiosks become the norm, more and more applications are being developed. It is estimated that through 2004, retail kiosk growth will average +27 percent and kiosk equipment sales will develop into a $5.3 billion industry. How big will your piece of the pie be? And are you ready to meet this demand? OEMs will need to learn more about what to look for in a bill acceptor and start integrating them into their kiosks in order to be one of the first to take advantage of this new revenue opportunity. Most of all, they will need to form partnerships with experienced bill-acceptor manufacturers who are willing to work with OEMs to design high-quality, high-performance kiosks that retailers and their end users can depend on.