By Scott Slucher, contributing writer
This article appeared in the C-store Self-Service Executive Summary, Summer 2006.
Tio Networks and Tranax Technologies recently announced a strategic partnership to launch a joint hybrid ATM initiative. A press release said Tio financial services will be available on the new Tranax Mini-Bank 4000 series ATMs as a result of the agreement.
Much of the buzz surrounding this announcement, and a similar partnership between Tio Networks and Cardtronics, has focused on the capabilities of hybrid ATMs. Hybrids combine the cash-dispensing elements of ATMs and the cash-accepting elements of kiosks, and have applications ranging from bill payment to gift card purchases to stored-value card dispensing and reloading.
While c-store chains like Exxon-Mobil, Circle K and Speedway are deploying these units, others are undecided. At least for now.
"Prepaid is one of the fastest growing segments in our industry," said Jeff Lenard, director of communications for the National Association of Convenience Stores (NACS). "Whether it's prepaid gas cards, phone minutes or other prepaid items, it's a tremendous growth opportunity for our stores."
Hamed Shahbazi, chairman and chief executive officer of Tio Networks, believes that hybrid ATMs represent a natural evolution. As "saturation picks up in the ATM space, where revenues on a per-unit base fall, c-store operators will look to ATM manufacturers to deliver equipment that delivers more value, more profit."
Shahbazi sees Tio Networks as the Swiss Army knife of distribution, with an expanding menu of services available for retailers to use as their customers demand.
Unbanked and underbanked consumers are the primary targets for these services and make up a significant portion of the U.S. population.
According to the Federal Reserve Bank of New York, "nearly 13 percent of households are ‘unbanked.' That is, they do not have transaction accounts offered by the nation's mainstream banking system. This equates to nearly 12 million U.S. households." This information, factored with U.S. Census Bureau figures, translates to almost 31 million Americans with no banking relationship.
The underbanked are difficult to tally because many people with banking relationships use kiosk-type services for a number of reasons.
"The highest users of non-bank financial services," Shahbazi said, "are banked people — people with existing banking relationships."
For instance, someone who has a checking account may find himself running late on a utility bill. To avoid a penalty or worse, he can satisfy the bill at the same time he stops in the c-store down the street for a cup of coffee and a donut on the way to work. The individual can enjoy his day in peace because he now has a receipt proving the bill was paid on time, if at the last minute.
The model seems to be working. Exxon-Mobil is "very encouraged, to date," said David Taylor, U.S. category manager for Exxon-Mobil. "Based on that, we plan to roll out to our chain."
"It's a tremendous opportunity for expanding what c-stores offer," Lenard said. "From immediate consumable items to gift cards, it's a whole new world. Most retailers are pretty excited about it."
