Financial Service Opportunity

Article by Frost and Sullivan on the opportunity for self-service kiosks in the financial services market.

In his seminal book, "Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits", management guru C.K. Prahalad expounds on serving the market comprised of the world’s four billion poor, as a route to fulfill social imperatives and profits. Global growth consulting company, Frost & Sullivan believes that Interactive Kiosks, which ease the economic and physical bottlenecks of distributing financial services, such as check cashing, bill payment and money transfers, have the pyramid jewels in their range. This article seeks to present a background to financial service opportunity for self-service kiosks, even in a developed nation such as the US.

The 2001 Federal Reserve Board Survey of Consumer Finances estimates that around 12.7 percent of U.S. households are "unbanked", or not in possession of a checking account.

Therefore, almost 12 million households make up a definite block of the "bottom of the pyramid" in the U.S.. According to the Financial Service Centers of America (FiSCA) (the trade organization for check cashers) there are approximately 11,000 check cashing centers in the U.S.

These centers cash more than 180 million checks annually, at a total face value exceeding $55 billion. The check cashing charges range from one percent to 10 percent depending on the type of check (government, payroll, or personal), the amount of the check, and in some states, possession of proof of ID for the customer. Check cashing services in 18 states are unregulated. Frost & Sullivan estimates the size of the check cashing industry at approximately $2.5 billion.

The U.S. Department of the Treasury has designed an Electronic Transfer Account (ETA) in order to offer affordable services geared to match the financial habits of the un-banked population; The ETA eliminates the burden of depositing minimum funds to open an account, mitigates the strain of maintaining the average minimum balance, and protects against the common prospect of bounced checks and its associated charges. The ETA ensures that individuals who are required to receive federal payments electronically have access to an account at a reasonable cost (no more than $3 a month) and have the same consumer protections available as other account holders at the same financial institution. ETA is available at around 18,000 banking branches in the U.S.

So where is the opportunity for kiosks? ETA does not solve the issues of banking in a convenient neighborhood location the way a kiosk does. ETA does not address the needs of immigrants who are not eligible for federal payments. Frost & Sullivan’s analysis on the "North American Interactive Kiosks Markets" assesses a significant opportunity in this context that ETA does not fill. In addition to offering convenient access by being centrally located, kiosks can be available 24/7 and can be programmed to speak the language of the customer. Furthermore, kiosks do not discriminate against users that are not U.S. citizens. Frost & Sullivan believes that in 2005 more than 5,040 new banking and finance kiosks will be installed worldwide. While banks and financial institutions deploy kiosks to service their customers, more than 7000 Telecommunications kiosks will be installed in 2005. A large portion of these telecommunications kiosks will be deployed to accept payments for landline and mobile phones. Although many carriers are experimenting with deploying their own kiosks to accept payments, they are simultaneously working with vendors of shared-use kiosks where users can pay bills, buy prepaid cards, and conduct other business. Confidence in the self-service kiosk industry reached rock bottom after a series of project failures around 2001. Nevertheless major investments by companies like Home Depot in-self service technologies are bolstering industry confidence and proving that self-service can be profitable.

Some key industry projects include:

• 7-Eleven’s Vcom network is comprised of 1040 kiosks that accept payment for the payment of utility bills, prepaid long distance, Verizon residential phone services and 7- Eleven’s E-Cash prepaid MasterCard, in addition to check cashing and money order purchases.
• QuikTrip convenience stores, spread across 446 retail outlets in nine states, is rolling out bill payment kiosks in 34 stores allowing customers to pay bills to a reported 4,400 companies including utilities, cable and phone-service providers.
• Blackstone’s Prepaid Stop kiosk includes leases, purchases, rentals or shared revenues. The Prepaid Stop offers prepaid wireless services of AT&T, Cingular, T-Mobile, TracFone, and Verizon as well as regional carriers AirVoice, AllTell, Beyond Wireless, Boost, Hargray, i-wireless and Omni Prepaid. The service has been deployed in supermarkets, drug stores and larger convenience stores along the East Coast over the past year.
• At the Coinstar Centers, customers can replenish prepaid wireless accounts of Alltel, AT&T Wireless, Cingular, T-Mobile and Verizon and reload prepaid Truth MasterCard cards. Employees of participating companies can obtain printed wage statements, balance inquiry and payroll cash vouchers.
• The 495 strong E-Wiz financial service kiosk network developed by Infotouch Technologies has been deployed in partnership with ExxonMobil in North Carolina, with Kum & Go stores in Tulsa and Oklahoma markets and with NOCO Express in New York.

These and other projects are demonstrating that consumers want more convenient means of conducting transactions. These projects show that self-service will enable companies like mobile phone carriers to expand their customer base and collect payments outside their normal hours of business, and beyond their normal storefronts. Simultaneously, these projects are showing that collecting payments at kiosks is creating a lucrative business for a variety of kiosk owners. In the same way that the majority of an iceberg is below the water, the opportunity to serve the unbanked may not be immediately obvious. Nevertheless vendors up and down the value chain, from service providers, to site owners, to kiosk vendors will all see growing revenues from serving the unbanked.

Financial Kiosks at C-Stores

ExxonMobil Expands Availability of ‘ewiz’ Financial Services Kiosks at on the Run Convenience Stores

Fairfax, VA--(HISPANIC PR WIRE - BUSINESS WIRE)--July 19, 2005--ExxonMobil today announced the expansion of ewiz(SM) financial services kiosks to On the Run(R) convenience stores in Chicago, South and West Florida and Southern California. The expansion is expected to continue in additional markets in 2006. The expansion follows successful market tests of the electronic payment system at On the Run and Tigermarket(R) convenience stores in Memphis, Nashville and Charlotte.

"ewiz offers customers a convenient way to pay wireless, utility and cable bills, transact financial services such as money orders, money transfers and check cashing, and purchase prepaid telecommunications products such as wireless top up, phone cards, ring tones and gift cards," said Michael Gore, manager, U.S. Convenience Retailing, ExxonMobil Fuels Marketing. "On the Run convenience stores are all about safely providing our customers with fast, fresh and friendly service. ewiz reinforces On the Run's delivery of fast and convenient service."

"With ewiz, customers need not experience long waits in line to pay bills or get telecommunications services," said David Taylor, category manager, Financial Services, ExxonMobil Fuels Marketing. "All they have to do is navigate the user-friendly touch-screen and be on their way. And the kiosks are available 24 hours a day, seven days a week."

ewiz kiosks accept cash, credit and debit as payment for the service provided. In the near future, it will also be able to accept checks as payment.

ewiz, developed for ExxonMobil by Info Touch Technologies Corp. of Burnaby, BC, Canada.

ExxonMobil, On the Run and Tigermarket are trademarks of Exxon Mobil Corporation (NYSE:XOM) or one of its subsidiaries. ewiz is a Service Mark of Exxon Mobil Corporation or one of its subsidiaries.

NOTE TO EDITORS: A high-resolution image is available at: http://www.hispanicprwire.com/index_in.php

--30--BD/da*

CONTACT:
ExxonMobil
Media Line
703-846-3367

Unbanked Financial Services

In the news: Retailers Reaching The Unbanked with Financial Services kiosks

Source: ATMMarketplace.com - by Tracy Kitten, editor • 29 June 2005

Bringing financial services to the unbanked is quickly becoming big business in the United States.

According to Chicago-based The Center for Financial Services Innovation (in its May 2005 research report, "Retailers as Financial Services Providers: The Potential and Pitfalls of This Burgeoning Distribution Channel"), 22 million households in the United States are unbanked. And financial institutions and independents are trying to figure out how they can get a piece of the action.

It’s a good market to reach, says Will Sowell, general manager of CashWorks. "The underserved population … spends an estimated $10 billion annually on transactions such as check cashing, money orders, money transfers, prepaid cards and bill payments."

And Dave Grano, founder, president and chief executive officer of Oregon-based VERO — a financial technology company that is developing check-cashing methods to help FIs and retailers reach unbanked customers through ATMs — said the unbanked U.S. market is untapped. He added that the U.S.'s unbanked are "primarily" immigrants who "don’t trust banks" and "find other ways to handle their funds."

Potential for new growth

Because FIs are fighting for ways to build their customer bases, the unbanked market offers potential for new growth. "Getting new incremental customers is very difficult for a bank because, typically, they’re fighting for customers with another bank. There’s not a gain (when an FI gets a new customer) because the customer is just moving from a different bank to your bank."

That’s where VERO comes in. Grano’s company has spent the last two years working on technology and solutions necessary to help FIs provide services that meet the needs of the unbanked.

His company also works with retailers, and for good reason. According to CFSI’s report, the majority of the unbanked and underbanked are more likely to go to retailers for financial services. As a result, FIs have their work cut out for them in reaching the unbanked.

"Just by matching some of the services up with a demo, we were able to see what services were going to take off."

-- Hamed Shahbazi,
Chairman and CEO, Info Touch Technologies

Salisbury, Md.-based ESP Consulting Group found that only 52 percent of the U.S.’s ATMs are owned by FIs. The rest are owned and operated by independent sales organizations or retailers. "A fifth of ATM transaction volume growth, which represents 1.19 billion transactions and $2.4 billion in revenues, has been picked up by non-bank firms," the CFSI report noted. "This substantial growth in non-branch ATMs signaled a major turn in retailers’ involvement in the provision of financial services."

That’s a marked difference from the unbanked overseas. (Read also, Reaching the unbanked: Learning from South Africa’s FIs.) In other parts of the world, FIs have spearheaded the effort to reach unbanked and underbanked populations. But in the States, alternative service providers such as check-cashing companies and retailers stepped up to the plate before FIs.

And there is a great deal of excitement about automated financial services at the retail level in the States, Grano said, which is why many companies are joining the force. San Francisco-based Swipe USA LLC, Burnaby, B.C.-based Info Touch Technologies Corp. and Louisville, Colo.-based KIOSK InformationSystems Inc. are three such companies. But other companies also have jumped on the band wagon, including Tranax Technologies Inc., Pay-Ease Inc. and CashWorks.

A non-branch approach

What's Important
The majority of the unbanked are black and Hispanic.
The Hispanic population is the fastest-growing in the unbanked segment.
Retail locations that offer services like bill payment and check cashing are preferred by the unbanked over banks.

"We’re in the process of launching several projects in urban areas, but we can’t talk about any of them yet," said Vijay Chattha, public relations spokesperson for Swipe USA. "I can say that overall we are coming at it from a retail standpoint. Basically, our goal is to bring dignity to some of those customers who are underserved or unserved right now. They told us they weren’t getting service in the best places (from a security and fee-charging standpoint)."

Info Touch and KIOSK have partnered to develop solutions, such as bill payment and check cashing services, that reach the unbanked. It’s a niche the two companies fell into, more or less, said Info Touch chairman and CEO Hamed Shahbazi.

"Phoenix was our original market, and it’s a heavily Hispanic market," Shahbazi said. "Just by matching some of the services up with a demo, we were able to see what services were going to take off. … We were the first in the market to work with this segment of the population and that’s where we’re focused."

Prepaid products and bill-pay services were two offerings that took off.

Who are the unbanked?

Shahbazi said Info Touch and KIOSK’s products specifically meet the needs of the Hispanic unbanked. But Jorge Fernandez, president and CEO of Coral Gables, Fla.-based Capture Systems LLC, disagrees. Fernandez, who spent last year working on a project to reach the unbanked in and around Miami, found that additional ATM options and check-cashing kiosks are not reaching the unbanked.

"The problem is that, as one unbanked customer put it, most of these services are designed by 'white folks' sitting in their air-conditioned offices," Fernandez said. "(They) focus more on the technology than on the actual service being provided. Most companies are focusing on automating the process, when in reality, that is not what the potential customer is looking for. They are looking for good, reliable and inexpensive service."

According to the 2000 U.S. Census, the majority is black and Hispanic. In fact, census figures show that 46 percent are black and 34 percent are Hispanic, and industry leaders like Shahbazi believe even those estimations are far too low.

In general the unbanked are people who have been ignored by FIs, so they’ve sought services like check cashing from other outlets. According to the United Financial Services Group, which operates 133 check-cashing outlets in 17 states, there are 13,000 CCOs providing services in the U.S. And according to the UFSG, they’re cashing about $80 billion in checks every year.

Check-cashing outlets make sense for the unbanked, Fernandez said. Check-cashing kiosks do not. Companies that add functionality to a kiosk or ATM are wasting their money, he said.

"People in these communities have a network of retailers they know and trust. Even if they have to pay a little more, they know that Western Union is trustworthy, (and) it's a company they know. ... Also, these folks do not trust banks or technology back in their native countries, so why would they do it in a foreign land?"

Convenience Store Kiosks

Touchscreen kiosk terminals provide convenience payment and financial services options for Charlotte-area marketplace

Press Release

BURNABY, BC, May 10 /CNW/ - Info Touch Technologies Corp. (TSX-V: IFT - News) today announced the rollout of E-Wiz kiosks at participating Exxon-branded On the Run convenience stores in Charlotte, N.C. The self-service, cash-accepting electronic kiosks enable convenience store patrons to use cash to pay wireless, utility, cable and other bills, as well as purchase prepaid products and services. This expansion follows the successful launch of the E-Wiz program at Exxon-branded Tigermarket convenience stores in Memphis, Tenn., in 2004, and subsequently in Nashville, Tenn., in January 2005. It brings to 87 the number of E-Wiz kiosks providing non-banked U.S. consumers with secure, convenient and reliable access to cash based financial transactions.

E-Wiz terminals provide customers with convenient access to a wide variety of services, including but not limited to, bill payment, money transfer, pre-paid products and services, including long-distance, wireless top-up and mobile content.

With E-Wiz, ExxonMobil's On the Run convenience stores have truly positioned themselves as one of the most innovative providers of financial services in the convenience petroleum industry," stated Hamed Shahbazi, Chairman and Chief Executive Officer of Info Touch. "On the Run convenience stores are certainly the most convenient location for the under-banked and time-challenged consumers."

"On the Run stores are all about safely providing our customers with fast, fresh and friendly service," said David Taylor, ExxonMobil Fuels Marketing. "The Info Touch electronic payment kiosks reinforce our delivery of fast and convenient service."

This newest expansion into North Carolina marks the first time E-Wiz terminals will be deployed to ExxonMobil On the Run franchisee locations.

"In addition to locating Info Touch E-Wiz kiosks in our company-operated convenience stores in Memphis and Nashville, Tenn., and now in the Charlotte area, we are excited about the deployment of this customer service to On the Run franchisees in Tennessee through Calloway Oil and Convenience Management Group, and Lee-Moore Oil and Propst Brothers, Inc., in North Carolina," said Taylor. "These installations represent the creative, aggressive and forward thinking of these companies."

Additional electronic-based payment options and financial services, such as such as money order purchases, money transfer services, prepaid credit and debit cards, check cashing, mobile content and prepaid pin based products, are also being considered for the Info Touch E-Wiz kiosks.

About Info Touch

Info Touch Technologies, a strategic investment of Hewlett Packard, is building the "TIO Network" - the largest and most convenient national multi-retailer network of financial services kiosks for the non-banked consumer marketplace in North America. The company leverages its core competencies in self-service bill payment processing, financial services aggregation and automation to create financial viability for its network and its location partners. Info Touch's Premiere (powered by Surfnet) is the preferred software platform for the delivery of automated services such as bill payment, money transfer, digital merchandising, PIN dispensing for pre-paid products and services, maps and directions, check cashing and electronic coupons. www.infotouch.net.

ExxonMobil, Exxon, On the Run and Tigermarket are trademarks of Exxon Mobil Corporation or one of its subsidiaries.

The TSX Venture Exchange has not reviewed this news release and does not accept responsibility for its adequacy and accuracy.

http://www.newswire.ca/en/releases/orgDisplay.cgi?okey=92019

For further information

Behshad Hastibakhsh, Media Relations - Info Touch Technologies, Tel: (604) 298-4636, Ext. 250, Toll Free: (888) 679-3322, Email: pr@infotouch.net
John Lewis, Business Development - Info Touch Technologies, Tel: (416) 364-2266, Toll Free: 1-877-600-6001, Email: jrlewis@infotouch.net

Source: Info Touch Technologies Corp.

Financial Service in C-Stores

In The News: Speedway SuperAmerica Joins Forces with Info Touch.

Info Touch and KIOSK InformationSystems partner on many projects for customers. Those would include Financial Services for Cricket and Circle K as well as E-Wiz for ExxonMobil. Here is the latest press release relating to Financial Services in convenience stores.

Press Release

Source: Info Touch Technologies Corp.

Speedway SuperAmerica LLC Join Forces with Info Touch Technologies to Deploy Self-Serve Terminals

Monday January 17, 12:46 pm ET

BURNABY, BC, Jan. 17 /CNW/ - Info Touch Technologies Corp. (TSX-V: IFT - News) today announced a test market deployment of self-service automated touch- screen kiosks in 26 Speedway SuperAmerica LLC store locations in Dayton, Ohio.

Powered by Info Touch's industry leading Premiere software (powered by Surfnet), the terminals will initially provide customers with convenient access to a wide variety of services including: bill payment, (using cash and credit cards), Wi-Fi, maps and directions, and auto insurance. Numerous other applications are planned for release at a later date that may include: money order and money transfer, prepaid products and services, and much more.

"This project is consistent with our vision of expanding the nationwide coverage of our financial-services applications. The initiative reaffirms our position as the leading solution provider for unattended financial services within the convenience retail industry," explained Hamed Shahbazi, Chairman and CEO of Info Touch Technologies. "With our retail partners, we are creating the most accessible, functional and pervasive network of automated kiosk terminals providing financial services in the United States."

About Speedway SuperAmerica
Speedway SuperAmerica LLC, headquartered in Enon, Ohio, is the nation's third largest company-owned and -operated convenience store chain with more than 1,600 stores located in 9 states. Most of the stores are operated under the Speedway and SuperAmerica brand names. Further information about Speedway SuperAmerica can be found on the World Wide Web at http://www.speedway.com.

About Info Touch
Info Touch Technologies, a strategic investment of Hewlett Packard, is the 'outsourced category manager' for automated services in the convenience retail and wireless industries. The company provides convenient, cost-effective solutions for bill payment processing, financial services aggregation, facilitation and self-service automation. Info Touch's Premiere (powered by Surfnet) is the preferred software platform for the delivery of automated services such as bill payment, money transfer, digital merchandising, PIN dispensing for pre-paid products and services, maps and directions, check cashing, electronic couponing, etc. Info Touch's clients include: Circle K, ExxonMobil, Alimentation Couche-Tard, Cricket Communications, Memphis Light Gas and Water (MLGW) and Qwest Communications. Visit www.infotouch.net.

For further information

please contact Behshad Hastibakhsh, Media Relations - Info Touch Technologies, Tel: (604) 298-4636, Ext. 250, Toll Free: 888-679-3322, Email: pr@infotouch.net
John Lewis Business Development - Info Touch Technologies, Tel: (416) 364-2266, Toll Free: 1-877-600-6001, Email: jrlewis@infotouch.net
Linda Casey, Public Affairs - Speedway SuperAmerica LLC, Tel: (419) 421-3262 (office), (419) 348-4851 (cell), Email:lmcasey@mapllc.com

Bill Pay and ATM

Rural Electric Cooperative Provides Bill Payment, Prepaid and ATM Financial Kiosk Services

DURANGO, Colo., Nov. 15 /PRNewswire/ -- La Plata Electric Association, Inc. (LPEA) positions itself to provide electronic prepay, bill pay and concierge services to cooperative members and community businesses this month with the launch of its first kiosk.

The solution, provided by Widefield LLC, Cities in Touch and KIOSK, offers Durango and surrounding area residents, businesses, tourists and LPEA cooperative members these benefits:

• Serves bill pay counter traffic more efficiently with kiosk payment locations, 24 hours, 7 days a week. Kiosk payments can be made by cash, debit card or through a checking account. Bill pay for additional businesses is also available. Demos may be viewed at http://www.payallbills.com.

• Makes recharging prepaid electric smart cards more accessible and less dependent on open service hours. Available 24 hours, 7 days a week, this application allows customers to recharge their EZ Pay cards when they want.

• Allows customers to access cash withdrawals with ATM functionality.

• Gives kiosk owner potential revenue stream and community involvement with Partners in Success(SM) program capability of providing advertising and ecommerce options to businesses.

• Other applications not in use at LPEA include debit card and payroll card dispensing.

La Plata Electric Association plans to implement its first kiosk in a vestibule at its central office in Durango followed by conveniently located sites throughout the community.

About Widefield, LLC.
Widefeld is an innovator in advanced billing and metering solutions and works with customers to produce focused innovative solutions applied intelligently to meet customer satisfaction objectives.
Editors can reach Widefield at 480-575-2726 or via email at jcollins@widefieldnet.com

About Cities In Touch
Cities In Touch creates, designs and develops interactive awareness solutions that reach into the community providing equipment, advertising, information, ATM, HR applications and other customized capabilities. Its Partners in Success(SM) program takes into consideration the importance of locating solutions in optimum locations.
Editors can reach Cities in Touch at 501-767-3426 or via email at info@citiesintouch.com

About KIOSK
Founded in 1993, KIOSK is the established leader in the design and manufacturing of unattended self-service kiosks for Financial Services, HR, Retail and other electronic self-service information terminals. Editors can reach KIOSK at pr@gokis.net

Contacts:
Joan Collins, Widefield, LLC, 480-575-2726; jcollins@widefieldnet.com
Ray Pierotti, La Plata Electric Association, Inc. 970-247-5786; website at http://www.lpea.coop