This excerpt originally published in Self-Service World magazine, Nov/Dec 2006's FOCUS.
Businesses looking to provide financial self-services, as well as increase their own profitability, have an untapped potential within the underbanked segment.
With both the Center for Financial Services Innovation and the National Community Investment Fund placing the number of unbanked households at approximately 22 million and the number of underbanked at another 10 million to 20 million, it is evident that a large segment of society operates outside traditional financial venues.
Many experts believe that the statistics surrounding the cash-preferred market are woefully underestimated because they do not take into account the large number of undocumented immigrants in the United States. Many of these immigrants are unbanked, largely because of issues of trust, said Hamed Shahbazi, chief executive officer of Tio Networks (formerly Info Touch Technologies). Someone who either is in the country illegally or has a family member who is, isn't likely to give personal information to a bank, even if his or her credit would allow that individual to get an account.
Serving the unbanked and underbanked segment is where bill-payment kiosks come into play.
Bill payment kiosks can help service providers overcome many of the challenges they face when managing their own payments and improve their customer service approach. Instead of having personnel occupied with accepting payments, service providers can automate the task and free up service representatives to sell products or assist customers. And kiosks located in accessible lobbies or c-stores aren't constrained by limited business hours. They are available 365 days a year, 24 hours a day.
Because of their accessibility to the unbanked and cash-preferred markets, bill payment kiosks can generate a new customer base for companies. The kiosks appeal particularly to recent immigrants, many of whom have an inherent distrust of traditional financial institutions. There are tangible benefits in the form of financial gain as well. Non-repudiation issues become virtually nonexistent. The software in Tio Networks devices recognize when customers access their accounts and which bills they insert. Reconciliation costs also are reduced as the possibility for human error is removed and presentment features are in place.
"Anytime we can reduce traffic in our office or reduce processing mail, then we're saving the company money," said Jon Laman, supervisor of customer information systems for Memphis Light, Gas and Water, a Tennessee utility company that has deployed 41 Tio bill-payment kiosks. "This is such an attractive, no-cost way to serve our customers."
The bottom line is, most often billers pay only a small fee for the transaction; most costs are paid by the user in the form of a convenience fee. Because of their accessibly to the unbanked and cash preferred markets, bill payment kiosks can generate a new customer base for companies.
Tio Networks was one of the first companies to recognize the needs of the growing cash-preferred market, and today, with its Tio-branded kiosks, it is one of the prominent players in providing financial services kiosks to the cash-preferred market. The network facilitates cash-based bill payment and financial services transactions for wireless, utility, cable, retail and independent application service providers. Tio has deployed more than 750 multiretailer units in 22 states, with plans to continue expansion at a rate of 30-plus units per month.
This article is excerpted from "Self-Service Bill Pay," a free publication from Self-Service World.
