Sun, Apr 02, 2006 page12

• All-purpose ATM customizes the convenience store

  • NY TIMES NEWS SERVICE
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  Would you like some financial services with that coffee?

  Convenience stores, best known to weary motorists as sources for drinks and snack chips, are starting to gain a reputation as good places to pay bills, cash checks, send money and buy cellphone minutes. Automated teller machines have long been a staple in these stores, but now several major US chains are installing kiosks able to do a lot more.

  Way ahead of the curve is 7-Eleven, which is introducing its second wave of custom-made terminals called Vcom this year.

  

  A multi-purpose Vcom machine is pictured at a 7-Eleven store in Winter Springs, Florida, on Feb. 13.

  PHOTO: NY TIMES NEWS SERVICE

  Often referred to as ATMs on steroids, the more than 1,000 Vcom kiosks 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.

  Aiming to keep up with 7-Eleven, 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 with the same type of kiosks. The machines are expected to become standard in convenience stores of all sizes.

  "The convenience retailers want to become a bank for the unbanked," said 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. "They're getting all this pressure from the Wal-Marts of the world, and they're trying to respond."

  The Circle K and Exxon Mobil machines are far more basic than 7-Eleven's Vcom kiosks, which have been called overengineered. Several dozen customers polled informally outside a 7-Eleven in Winter Springs, Florida, recently said that they had never used the Vcom inside, and one woman who said she did use it once to withdraw cash complained that it was "confusing" and "complicated," and added that she would not use it again.

  "There were just too many steps," said Peggy Baker, who teaches French in Winter Springs. "And the US$1.75 transaction fee was too much -- it was painful."

  She said she was not interested in the other Vcom features, which require users to enroll and enter a Social Security number.

  But several customers using a bill payment kiosk in a Cingular Wireless store in the Astoria section of Queens, New York, last month raved about the ease and convenience of the terminal, even though they had to pay a US$2 fee and round their total up to the nearest dollar, because the terminal did not accept coins. The kiosk, supplied by Info Touch Technologies, is the same used by Exxon Mobil and Circle K; clerks in the Cingular store said at least 50 people a day used the machine -- more on weekends -- and that the only time it malfunctioned was when it was too full of cash.

  "I use it all the time to pay my bills; it's pretty good," said Daisy Borges, who works in the linens department of a home accessories shop near the Cingular store and who dropped in to pay her US$39.99 monthly Cingular bill during a lunch break.

  Borges said she used to mail a check to pay the bill, but switched to using the kiosk three months ago. "It goes faster, it works better," she said. "I'm pretty sure that my money goes to the right people."

  And the US$2 fee?

  Borges shrugged and said: "Nothing is free in New York."

  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 US$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 in order to pay a bill or withdraw cash, they may be tempted to buy a soda or a sandwich. In addition, the customer gains privacy and may be able to avoid a separate trip to pay a bill.

  "What most companies are looking at it for is to drive new customer traffic as opposed to driving revenues from the specific kiosks," said Jeff Lenart, a spokesman for the National Association of Convenience Stores, a trade group.

  It is difficult to pinpoint how much extra revenue the terminals generate in incremental food and product sales, Lenart said, but the idea is to get people to change 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," said David Taylor, category manager for store services for Exxon Mobil, which began installing eWiz bill pay terminals in Memphis, Tennessee, in 2004. "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."
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