Millions of Americans operate outside of the traditional banking system. Either they are completely “unbanked,” meaning they have no accounts with traditional financial institutions at all, or they are “underbanked.” They have basic accounts, such as a checking or savings, but they rely on alternative financial services providers such as payday lenders and check-cashing establishments to handle their day-to-day transactions. Some have all of the standard financial services products, but they prefer to pay bills in person for a variety of reasons. For example, they are uncomfortable conducting business online or through the mail, or they don’t have the funds to pay their bills until the due date.
Since these individuals primarily use cash to make purchases, paying bills can be a hassle. Instead of mailing a check or relying on the bill-payment services offered by most large banks, they must stand in long lines at retail establishments to ensure their accounts stay current. However, advances in payment kiosks offer a promising solution for users of non-traditional financial services. These automated payment stations improve convenience for customers and create a variety of benefits for payment providers.
The Technology Behind Payment Kiosks
Payment kiosks can handle all of the transactions that once required an in-person visit to a physical location offering payment services. Examples include:
- Bill payment processing
- Credit card payment processing
- ACH payment processing
The specialized cash-handling apparatus accepts and counts bills accurately, offering customers the opportunity to confirm the amount of their transactions before funds are transferred. Better still, the technology has improved to the point where users don’t have to struggle with inserting wrinkled or creased money. The system is capable of quickly verifying routing and account numbers to ensure that payments are applied to the correct accounts, and most transactions are completed in a fraction of the time that an in-person payment usually takes.
Some basic maintenance tasks are still the responsibility of staff members, such as changing receipt paper. The major maintenance is performed by service providers remotely. Providers can monitor payment kiosks from centralized command centers, and they can push software upgrades or reboot malfunctioning machines without visiting the store.
Some retailers express concerns with bringing kiosk payment services into their locations because they worry about the excessive downtime often associated with automated technology. They are also concerned that the machines will be difficult to use, requiring customers to request assistance from staff members on a regular basis. Fortunately, the current kiosk technology has proven extremely reliable and is designed with intuitive user-interfaces and clear instructions to minimize the need for staff intervention.
Benefits of Kiosk Payments for Retailers
Many retailers have connected with service providers to provide third-party payment processing. The fees associated with processing payments can supplement profits when sales lag, and the additional service builds customer loyalty. However, establishments often discover that managing bill payments involve a significant amount of additional work for limited compensation.
The primary issue is that government benefits are paid at the same time for all customers – typically the 1st and the 15th of each month. Inevitably, this leads to long wait-times, which can result in the loss of more-profitable business. Of course, discontinuing the service isn’t a viable alternative, as customers will move on to another provider for all of their bill payments, check cashing and retail purchases.
Kiosk payments solve this problem by automating the bill payment process. Customers make their transactions through the machine, instead of waiting in line to work with a staff member. Each payment is completed more quickly, and individuals with additional needs are on-site and able to complete their business at the location of their choice.
Not only do kiosk payments ensure that there is no loss of customer loyalty – they also encourage significant amounts of foot traffic. Individuals who might not otherwise visit a particular retailer will come to use the kiosk, and stay to make additional purchases. Better still, by automating bill payments, retailers are able to reign in the payroll expenses related to staffing for bill-payment services, while still enjoying the benefits of increased sales. Kiosk providers handle the majority of maintenance tasks, and they provide employee training for the small day-to-day activities that are needed.
Many retailers have another reason for implementing the use of payment kiosks: security. The machines can only be unloaded by a member of management, which dramatically decreases the number of people handling all of the cash associated with bill payments. The risk of human error is eliminated, and instances of employee theft are greatly reduced. By ensuring that there are few bill-payment-related losses, retailers increase their overall profits.
Providers of payment services also realize a variety of benefits from automating the bill payment process. First, machines are less labor-intensive for retailers, so providers are able to establish a presence in many more locations than they might otherwise. Second, payment kiosks can be branded, which expands marketing opportunities. The result of all of this is increased brand awareness, which ensures that customers return to the reliability and convenience of automated kiosk payments again and again.
For most customers, paying bills is one of the less-popular chores, and long lines can make the experience more distasteful. Kiosk payments are a growing solution for fast, accurate and efficient bill payments.