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, Tio executive vice president.
More than 90% of consumers using the machines are unbanked or underbanked, Shahbazi says. Users deposit cash in the machines to pay bills from utilities, cell-phone providers, cable companies, credit card issuers and stores, he tells ISO&Agent Weekly. Customers also may 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, Shahbazi says.
Tio provides around-the-clock customer support via a toll-free phone number displayed on the machines, he notes.
Genmega Inc., a Fremont, Calif.-based manufacturer, makes most of the machines that use Tio software, Shahbazi says.
ISOs pay about $4,000 each for a machine, and Tio charges a one-time licensing fee of $595 for the software.
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 to 40 ISOs own machines through a program that began in 2004, he adds.
Independent deployers can monitor the machines remotely by logging on to a computer for reports on funds in a machine’s cash box and alerts when the printer paper runs low, the mechanism that accepts cash has jammed or the power has gone.
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.
Transaction volume depends upon the location, Tio says. Most machines require three months to six months to reach their potential volume. Awareness of the machines usually spreads by word of mouth.
Users pay a fee of $2 to $5, depending on 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 to 56 cents, and the deployer would keep $1.69.
Consumers who insert $55 for a $50 utility bill and $3 fee would receive a $2 credit toward next month’s bill, Shahbazi says.
