News

MEI #5 - Internet On the Go With Cash-Accepting Web Kiosks

April 8, 2002

Back when the Internet was just starting to break into mainstream communications, the idea of Internet access was still a glimmer on the horizon for the average person. It seemed that the Internet would be a remarkable - yet elusive - tool. Remarkable because it offered a whole new world of information with just the click of a mouse button. Elusive because in order to obtain Internet access one needed to purchase not only an expensive home computer system and modem, but complicated software as well. The Internet may have been the shining star of the information industry, but the complex equipment and high price tag kept it out of reach for many people.

Over the years, the Internet has grown in leaps and bounds, and more sophisticated equipment has made Internet access a reality for millions. Today, consumers no longer have to rely on a PC, or even a laptop. Thanks to innovative developments in public Internet access - such as Web-enabled kiosks, Cyber cafes, and Web pay phones - consumers can access the Internet from almost anywhere.

And this is just the beginning. Frost & Sullivan, a firm that evaluates the public Internet kiosk industry, projects that this industry - which was virtually non-existent two years ago - will grow to 380,000 units in the United States and 500,000 units worldwide by 2005. These numbers closely parallel the statistics of the ATM business, which experienced a similar boom in the last two decades.

Advants Public Internet Access, Inc. (Advants), based in Minneapolis, MN, became a dominant player in the world of Internet access by creating a network of cash-accepting, Web-enabled kiosks, placed in convenient locations. Founded in 1999 as a majority-owned subsidiary of Choicetell Communications - which owns and operates pay phones - Advants is the only public access Internet company that works on the pay phone/vending machine model. This provides consumers with convenient Internet access on a pay-per-use basis, accepting both cash and credit cards; and provides retailers with kiosk equipment, installation, and maintenance, free of charge. In exchange for the space, Advants shares the kiosk's revenues with the site owner.

Advants began deploying its Web kiosks in April 2000, and has since installed 220 kiosks in 16 states across the country. Advants kiosks now offer on-the-go, pay-per-use Internet access to patrons of bowling alleys, convenience stores, supermarkets, restaurants, bars, highway truck stops, senior homes, malls, and more.

Though all Advants kiosks accept both cash and credit cards - all are equipped with MEI (formerly Mars Electronics International) AE2600 bill acceptors - 75 percent of Advants' business since installation has been cash. Brad Tait, COO of Advants, credits the kiosks' cash-accepting feature with the business's phenomenal success. "Consumer behavior studies show that a large percent of people still deal in cash, especially in the locations of our kiosk sites," he says. "Without a cash acceptor, we would lose that entire market."

Tait adds that many consumers still fear giving their credit card numbers over the Internet, and are far more comfortable with the security of cash. "Plus, the transaction amount is low," he says. "Consumers typically have $1, $5, $10, or $20 in their pockets, and would rather use that than be forced to pay the credit card minimums that are required."

According to Tait, the kiosk's bill acceptor is critical to customer satisfaction. "We know that if a customer has a bad experience with our system, especially if dealing with cash, he or she probably won't try our service again," he says. Armed with this knowledge, Tait reviewed bill acceptors extensively and talked with professionals who have experience using bill acceptors in other high-cash volume industries - such as gaming and vending - before he decided to go with an MEI product.

"With all of my research, MEI's product was really the only choice," Tait says, noting that MEI's products are the most widely used, the most technologically advanced, and have the best performance ratings in the field. "To my knowledge, we have never had a single mechanical failure of the bill acceptor. And we would know, because users are encouraged to use our toll-free customer service hotline to report any problems."

One of the biggest concerns in the industry has been that cash-accepting Internet kiosks will accept cashÂ… but don't give change. For Tait, however, this fear has proved to be unfounded. "Our units don't give change, and this hasn't been a problem at all. We deal in time; customers pay X dollars for X minutes of Internet access. Usually, they use it all up."

And how have the retail sites benefited from the addition of an Advants cash-accepting Internet kiosk? According to Tait, there has been nothing but praise. "Retailers have been thrilled with the kiosks. Customers come to their establishments more often and stay longer," Tait reports. "For customers, it's an added bonus to come back - everybody wins."