Total System Services Inc. is planning to move into the kiosk hardware market.

The Columbus, Ga., transaction processor already offers kiosk management software, which it picked up with its purchase last year of the payments technology vendor Infonox Inc. It now wants to put its own name on machines able to handle financial services for the unbanked.

Ashim Banerjee, the chief information officer for the processor's merchant acquiring unit, TSYS Acquiring Solutions, said his company plans to target small convenience stores, which may already be offering check-cashing and money orders.

"Many mom-and-pop merchants are doing this on the counter already," Banerjee said in an interview last week. "It's just a small step to move it to the kiosk." He said he sees about 55 million unbanked consumers as the primary kiosk customers.

Dean Seifert, TSYS Acquiring's senior vice president of sales, said his company would supply hardware, installation, cash services and customer support. "We don't believe a merchant or an ISO should take on support of the kiosk," he said. "It's about off-loading cumbersome processes like money orders and check cashing from the merchant, making his life easier and his customers happy."

Infonox's KioskPass software, which can run on any automated teller machine or kiosk that uses Microsoft Corp.'s Windows operating system, lets people use kiosks to withdraw money, cash payroll checks, initiate money transfers, pay bills, buy prepaid gift cards and make check deposits through a remote deposit capture service.

TSYS Acquiring is developing a version of the KioskPass software to run on automated teller machines from Diebold Inc., NCR Corp. and Wincor Nixdorf AG and is working with kiosk providers that the executives would not name.

"Going direct and establishing our own relationships with hardware manufacturers is definitely part of our 'go-to-market' strategy," Seifert said. "Branding the hardware not only allows us to maximize the performance of our KioskPass application but … also allows us to manage costs in such a way that we can make it possible for merchants of all sizes to offer a full-services payment kiosk."

Robert J. Philbin, TSYS Acquiring's president, said his unit would work with independent sales organizations to market the kiosks.

"We don't have the distribution channel to get this to the marketplace," he said. "The ISOs do."

George Peabody, the director of the emerging technologies advisory service at Mercator Advisory Group Inc., said that TSYS has more clout to deliver the KioskPass technology to end users than Infonox had. "Infonox now has a larger parent company and the ability to leverage the relationships that TSYS has," he said. "This is adding TSYS muscle to Infonox technology."

However, he said pricing could be an issue because kiosks typically have high up-front costs. TSYS would not disclose pricing data.

Bob Schoenbauer, the president of Capitol Payment Systems Inc., an Annapolis, Md., ISO, said, "We haven't found kiosks to be profitable enough for our agents."

"Kiosks are about driving more transactions," said James Van Dyke, the president and founder of Javelin Strategy and Research. "The profit is going to be more in the transactions than in the device."

Van Dyke said TSYS' success depends on finding merchant segments, like movie theaters, where kiosks augment sales. "If they can find a few merchants that really have a good fit, then that can be a strong play to drive transaction volume," he said.

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