MoneyGram International Inc. said it will offer money transfers and last-minute bill payments through Cardtronics Inc.'s Vcom kiosks, which are installed in many 7-Eleven Inc. convenience stores in several key markets.
MoneyGram said it has offered some financial services through kiosks in the past, but the agreement announced Monday is the Minneapolis company's biggest such effort to date. The services will be available starting next month.
The process of initiating transfers through Vcoms is not fully automated — users will have to talk to a live agent on a phone that is set up next to each kiosk — but MoneyGram said the arrangement is enough of an advance in the direction of self-service that it expects the Vcom machines to help it reach a new group of customers.
Kiosks are "a great potential channel for us, being able to reach out to consumers through a convenience store chain with the brand of 7-Eleven," Rick Byrne, MoneyGram's vice president of strategic relationships and national accounts, said in an interview Monday.
Cardtronics has Vcoms set up in about 2,250 7-Eleven convenience stores in the United States, Mr. Byrne said.
Earlier kiosk implementations by MoneyGram involved "tens" of machines, he said. "We've had some relatively small initiatives in this space but nothing … the scale of this."
Though MoneyGram hopes to branch out to other types of kiosks, its immediate plan is to follow Cardtronics' deployments. If the Houston automated teller machine operator deploys more Vcoms, MoneyGram hopes to have its services running on those, as well.
The last-minute payment service, ExpressPayment, will be offered at the kiosks in addition to a service currently offered through another company, MoneyGram said.
(Cardtronics did not return calls for comment.)
That service, which offers payments that do not post immediately, is "typically used to pay utility bills and bills that are not needed to be paid on an urgent basis," whereas MoneyGram's service would post consumers' bill payments "almost immediately," Mr. Byrne said.
In its other channels, the last-minute service is used roughly as much as money transfers, he said, and he expects to see similar patterns at the Vcoms.
"A big part of our distribution strategy is allowing choice to the consumer," Mr. Byrne said.
"As people become increasingly technologically savvy, they want to have a choice that allows people to stop the human interaction and get things done at their own pace, and often it can be more quickly done, depending on how good they are at working with automated devices."
Initiating a transfer at a Vcom is expected to take about two to three minutes to complete, he said, and that length of time is comparable to that required with other channels.
Cardtronics bought the Vcoms from 7-Eleven in July of last year as part of its purchase of the Dallas retailer's entire ATM operations, including 5,500 machines.
At that time Cardtronics said the NCR Corp.-built Vcoms, which dispense cash and allow bill payments, transfers, check cashing, and other financial transactions, were not bringing in as much revenue as it wanted.
This year Cardtronics said it was working to turn that trend around. It moved many of the units to focus coverage on 15 to 16 markets.
Jennifer Roth, a research director with the global payment practice at TowerGroup Inc., a Needham, Mass., independent research firm owned by MasterCard Inc., said the new MoneyGram services may not attract business from new customers, but it should attract more business from its current ones.
"We've seen others try to do this, as well, in the ATM channel and the kiosk channel … beyond just dispensing cash, and I think a few years ago it was not cost-effective," she said.
A critical difference here is the MoneyGram brand, which is already well associated in consumers' minds with these types of payments, Ms. Roth said. "For the consumer that would be using this, they would have a comfort level" from just the MoneyGram name.
In addition, the scale of the kiosk deployment, as well as the number of services being offered at once, will help the new services, she said. "They're positioning it better, because they're adding other things people are doing at the same time."
