ATMs & Self-Service Kiosks Converge To Target $12 Billion Plus Unbanked/Underserved Consumers

Implications: Key Implications:  TIO Networks and ExxonMobil extend an already fruitful agreement through 2012, to reach the unbanked/underserved consumers at its C-stores.  Self-service kiosks which function as financial services kiosks will grow from 21,400 kiosks in 2004 to approximately 57,400 kiosks by 2009, which is a 20% CAGR, compared to a 1% annual growth rate for the ATM and 28% of the 21,400 kiosks (16,200) will offer prepaid cards and reload capabilities, paving the way for a new revenue model for the traditional ATM.  The underbanked/underserved consumer represents 40 million households without a bank account but who also spent over $12 billion on check cashing services, money transfers, and mobile top-up services, which is why ExxonMobil and other C-stores want to become the bank for the underbanked. Approximately 52% of ATMs are owned by FIs (Financial Institutions) and the rest are owned by ISOs, which leaves alot of room for a new revenue model for ATMs/Kiosks.

Analysis: Comments/Perspective:
The ATM and kiosk are converging to offer a new revenue model for retailers, banks and C-store operators, in an effort to reach the underbanked/underserved market, (consumers with little to no banking relationship with a FI) by offering multifunctional transactions such as bill-payments, check cashing services, money transfers, mobile top-up services, and the ability to purchase prepaid cards and reload prepaid cards at one central location, a financial services kiosk.

1.  TIO Networks in partnership with NetSpend and ExxonMobil will offer customers the ability to activate and reload TIO MasterCard's Prepaid Card at the TIO self-service kiosk in On the Run and Tigermarket ExxonMobil C-stores.  Customers will have the ability to load the prepaid card with funds, make purchases or gain access to their cash anywhere MasterCard is accepted around the world

2.  Other competitors such as Coinstar, NetSpend, Infonox, Elan Financial Services, First Data, the Green Dot Network (prepaid/reload services), MasterCard - rePower and Visa - ReadyLink are partnering and entering the market to offer self-service kiosks and prepaid and reload services to target the unbanked/underserved market of $12 billion plus

3.  Converging the ATM and Kiosk to offer multifunctional transactions has been a buzz in the industry for several years and with software and hardware enhancements, consumer acceptance and the convenience factor, kiosks can now handle retailers and banks daily transactions and  can migrate the costly person-driven (teller/clerk) transactions to a machine, which may lower banks, retailers and C-stores operational costs, grow revenues and free up the tellers/clerks for other services