Tio Networks Corp. is looking for independent sales organizations willing to buy and set up “reverse ATMs” that collect money instead of dispensing it.
Vancouver, British Columbia-based Tio writes the consumer-facing software for the machines and processes the bill payments users make on them, says Sam Shahbazi, the company’s executive vice president.
Consumers, more than 90% of them unbanked or underbanked, deposit cash in the machines to pay bills from utilities, cell-phone providers, cable companies, credit card issuers and stores, Shahbazi tells PaymentsSource. Customers can also use the machines to buy prepaid PINs that work like electronic versions of prepaid phone cards, he notes.
The machines, often located in convenience stores, typically accept payments for 60 to 65 billers, says Shahbazi. Many of the billers accept and post payments almost immediately, an important factor for lower-income users who often pay a utility bill at the last moment to prevent a shut-off, Shahbazi says.
Tio provides around-the-clock customer support via a toll-free phone number prominently displayed on the machines, he notes.
Genmega Inc., a Fremont, Calif.-based manufacturer, makes most of the machines that use Tio software, Shahbazi says.
Independent service organizations pay about $4,000 each for a machine and Tio charges a one-time licensing fee of $595 for the software, a TIO spokesperson says.
Tio has been in the reverse-ATM business for a decade and owns and operates 1,200 machines, while independent deployers have placed between 200 and 300 of them, Shahbazi says. Some 35 or 40 independents own machines in an ISO program that began in 2004, he adds.
Independent deployers can monitor the machines remotely by logging onto a computer for reports on the level of funds in a machine’s cash box and trouble-shooting alerts when the paper for printing receipts runs low, the mechanism that accepts cash has jammed or the local power has gone out, Shahbazi says.
To get started, independent deployers may buy a machine online, purchase the Tio software and set the machine up in the store, which usually requires little more than plugging in power and Internet cables, Shahbazi says. Tio activates the machines over the Internet, he says.
Tio does not say how much money independent deployers can earn with the machines because transaction volume depends upon the location.
“We don’t guarantee you’ll get rich in two years,” Shahbazi says.
Most machines require three months to six months to reach their potential volume, with some taking as long as nine months before they “are running on all cylinders,” he says.
Awareness or the machines usually spreads by word of mouth in communities, he notes.
Users pay a fee of $2 to $5, depending upon Tio’s negotiations with local billers, Shahbazi says. Of a typical $3 fee, the biller might receive 75 cents, Tio might charge 25% for processing, which comes 56 cents, and the deployer would collect $1.69.
If a consumer inserts $55 for a $50 utility bill and the fee comes to $3, he or she would receive a $2 credit toward next month’s bill, Shahbazi says.
What do you think about this? Send us your feedback.
