Report: Transaction Kiosks Will More Than Double by 2009

The installed base of ATM-like machines that allow consumers to pay bills, cash checks, top up prepaid wireless cards, and perform other financial transactions is set to explode as retailers and banks seek ways to serve the population of unbanked and underbanked customers, a new research report says. Indeed, the number of these financial-services kiosks, which are mostly installed in retail outlets, will more than double by the end of 2009, growing from 27,323 in 2005 to 57,363 in four years. And even that growth will hardly tap out the market potential, says the report, released by The Aite Group, Boston, and entitled, “Kiosks in Financial Services: Targeting Fringe Banking Users.” “By the end of 2009, we estimate that only 21% of the potential locations…will be filled by financial-services kiosks, up from 10% in 2005,” the study says. It goes on to estimate that there are about 271,000 retail locations where kiosks could be deployed, led by gas stations with convenience stores (34% of locations), supermarkets (24%), and c-stores (11%). Bank branches account for about 26% of these potential locations. Fueling the trend is the burgeoning population of consumers who either don't maintain bank accounts or prefer the convenience of self-service. Already, merchants and banks are finding the use of machines to serve the financial needs of these consumers to be effective in building traffic and cementing loyalty. One of the most aggressive of these is 7-Eleven Inc., which has deployed kiosks in 1,050 stores capable of a range of services, including check cashing, money transfer, and bill payment. A number of recent developments are also driving deployment, the report says, including: reduced costs for components and for broadband links; a desire by ATM makers to seek out related markets as their mainline business reaches saturation; and the opportunity personnel-restrained retailers such as c-stores see to build on the success they've had with prepaid cards. The report sees electronic bill payment dominating the functionality of these machines, with the number of kiosks capable of this function more than tripling by 2009, to 39,200, or more than two-thirds of the installed base. “Walk-in bill payment represents a key opportunity for the kiosk channel,” says the study. Indeed, the report predicts that the volume of walk-in payments performed at kiosks will balloon from 58 million in 2005 to 182 million in 2009 (with the bulk of these transactions occurring at biller locations rather than in retail stores), while the entire walk-in bill-payment market grows just 3% annually, from 749 million to 853 million. This means kiosks will control 21% of all walk-in bill-payment transactions by 2009, up from 8% now. Prepaid wireless top-up will be available on 26,800 machines, up from 9,300 in 2005, the study projects Some 16,200 will dispense prepaid cards, compared to 12,200 now. And check cashing will be available on 9,900 kiosks, up from 4,200. Coin counting, long a bread-and-butter function, will grow from 11,000 machines to 13,700.