Kiosk Kraze

NEW YORK--ATMs have long been a staple in convenience stores, but now several major chains are installing kiosks that are able to do a lot more, reported The New York Times .

7-Eleven is introducing its second wave of custom-made terminals called Vcom's this year. Often referred to as "ATM's on steroids," the more than 1,000 Vcom's dispense cash, sell Verizon services, handle bill payments and let customers send money to other people. They can also cash checks to the penny, simultaneously snapping front-and-back digital images of the checks and dispensing a receipt with the images on it.

Exxon Mobil and Circle K have introduced bill payment kiosks in some areas, with plans to take the programs national. Sunoco just set up a pilot involving the same type of kiosks. These machines are expected to become standard in convenience stores of all sizes, reported the newspaper.

"The convenience retailers want to become a bank for the unbanked," Hamed Shahbazi, chief executive of Info Touch Technologies, a company in Burnaby, British Columbia, that supplies hardware and software for the Exxon Mobil, Circle K and Sunoco programs and others, told the newspaper. "They're getting all this pressure from the Wal-Mart's of the world, and they're trying to respond."

At convenience stores, companies have found the kiosks make business sense. If a machine is handling a money transfer or a bill payment, no cashier is involved in the transaction--which typically involves $200 or so in cash--reducing the likelihood of employee theft and freeing clerks to handle other transactions. And when people come in to a store deliberately to pay a bill or withdraw cash, they may well be tempted to pick up a soda and a sandwich. In addition, the customer gains privacy and may be able to avoid a separate trip to pay a bill, reported the newspaper.

"What most companies are looking at it for is to drive new customer traffic as opposed to driving revenues from the specific kiosks," Jeff Lenard, a spokesman for NACS, told The Times .

It is difficult to pinpoint how much extra revenue the terminals generate in incremental food and product sales, Lenard said in the report, but the idea is to get people to start changing their habits so that they shift their bill-paying or other chores to a convenience store from elsewhere.

"What is very exciting is to see a brand new person come in and use the machine and see how easy it is," David B. Taylor, category manager for store services for Exxon Mobil, which began installing eWiz bill pay terminals in Memphis in 2004, said in the report. "Some of those folks may take a bus to a bill payment center, and now they find they can just go down to the corner and pay their bills. It has made their lives easier."

"At 7-Eleven, what we have seen is that the number of transactions has continued to increase and the average size of the transaction has continued to increase," Greg Adelson, ChoicePay's president said. "That could be utility bills going up, but it might be an indication that people feel comfortable putting that much money into a kiosk and getting instant credit" for the paid bill.

Exxon Mobil has so far installed 77 eWiz terminals but plans to make eWiz "a standard program at all our facilities," Taylor told the newspaper. The biggest challenge, he said, is to get a critical mass of billers to sign up in a given market, so it will take some time before eWiz is ubiquitous.

Exxon Mobil also plans to add functions to the terminals, which charge $3 for a bill payment. Soon eWizzes will handle money orders and sell prepaid phone cards, among other things, Taylor said.

Circle K's Zaplink terminals already offer bill payment (also for $3) and Web browsing, so that customers can check e-mail. One day they will offer money orders, cellphone top-ups and a menu of other products and services, Dan Stiel, manager of financial services for Circle K, told The Times . But the stores' ATMS's are unlikely to be retired anytime soon.

In choosing locations for Zaplink terminals, Circle K deliberately picked areas in Arizona, Texas, Florida and other states with high immigrant populations, with the idea that immigrants would be less likely to have bank accounts and more likely to relish a convenient option for paying bills. And in some 7-Eleven stores where there are high immigrant populations, Spanish is the top language option on the machine.

Lenard told the newspaper he tried a Zaplink terminal in Phoenix, paying $3 for Internet access and using it to create a video postcard of his infant son. "I thought it was really cool," he said.

But the idea does not appeal to all convenience store companies, Lenard told the newspaper. He said he was promoting Zaplink's virtues to an executive from the Wawa chain, which is based near Philadelphia. "He said: 'It doesn't work for us. Our customers don't want to find out that they can't get a parking space because there's a couple of people surfing the Internet. They don't want to have to walk down a different aisle because there are a couple of people clustered around a kiosk.' "