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Family Dollar Stores Inc., a self-service discount retail chain for lower-income consumers, is in Tio Networks Inc.'s sweet spot. Tio owns and operates self-service bill-payment kiosks that target families earning $20,000 to $60,000 annually.
Tio recently began a one-year test of 10 of its kiosks at an equal number of Family Dollar stores in El Paso, Texas. Family Dollar Stores Inc. operates 6,600 stores in 44 states.
"This is a very limited test," says Josh Braverman, a Family Dollar spokesperson, tells ATM&Debit News. After the test is completed, Family Dollar will evaluate the service to determine whether to extend it to other stores.
During the test, which began in mid March, consumers can use cash at kiosks to pay utility and cellular-telephone bills and to transfer funds, Hamed Shahbazi, Tio Networks chairman and CEO, tells ATM&Debit News.
The Burnaby, British Columbia-based company charges consumers $3 to $5 to have their cash payments immediately applied to their accounts at authorized direct billers, which include El Paso Electric Co. and Dish Network. Family Dollar previously had not offered bill-payment services, but the company decided to test the kiosks at the entrance of some stores as an added customer service, Braverman says. Family Dollar is based in Matthews, N.C.
Certain types of consumers are more likely than others to use the kiosks, Tio says.
"If their income is below $60,000, it is better for us. But if it gets below $20,000, it is troublesome," Shahbazi says. "Many of our customers live from paycheck to paycheck."
This particular demographic group is more likely to rely on cash in managing their household income, and Tio facilitates last-minute cash payments of bills, says a Tio spokesperson.
Tio customers generally have bank accounts, but many prefer the immediate posting of bill payments paid in cash, Shahbazi adds.
Expedited payments appeal to some customers, especially those who pay their bills close to the due date," says Kate Monahan, an ATM analyst with Boston-based Aite Group.
A Tio spokesperson agrees, noting that, because of the economy, "some consumers budget their money more carefully and pay their bills at the last minute in cash." ATM
