November 26, 2005

Check Cashing Kiosks and Bill Pay

Cashing checks at kiosks in Convenience Stores is significant source of revenue.

original story on selfserviceworld

Self Service World News

The check stops here

Most c-stores cash checks, but providing that service at the counter can be a double-edged sword. While check-cashing offers an additional revenue stream, it also pulls clerks away from assisting other customers and increases the amount of time customers have to wait in line.

Offering check-cashing services is still worth the headache, though, according to Joe Harris, general manager of Hamburg, N.Y.-based ANS Marketing LLC, which provides ATM systems, service and transaction-processing to c-stores and other retailers.

Harris said that during tax-return season, c-stores could cash several million dollars in checks over the course of one month. Cashing those checks is a great source of revenue, he added, since the average return is $300 and the c-store charges a percentage or flat fee to cash each check.

The day-to-day business of cashing checks is profitable also. According to The Center for Financial Services Innovation, a Chicago-based organization that researches financial service offerings for underbanked consumers, 28 percent of those who receive Social Security and disability benefits in Chicago, Miami, Los Angeles, New York, Baton Rouge, La., and Greenville and Spartanburg, S.C., cash their benefit checks at grocery stores.

CFSI notes in its report Retailers as Financial Services Providers: The Potential and Pitfalls of This Burgeoning Channel, which was released in May: Check cashing is an important service for many un- and underbanked consumers, and retailers have long played a role in providing this service. Retailers see a market that is willing to pay fees to cash checks, is drawn to convenience and may not feel comfortable with banks or chooses not to form a banking relationship.

Handle with care

C-store operators have tried to automate check-cashing services, with mixed results. Early in the automation revolution, many experimented with check-cashing at the ATM a solution that had some faults.

If you put check-cashing services onto the ATM, then you havent solved the problem of people waiting in line, Harris said. If people have to wait in line to use the ATM, they arent likely to come back to your store. Theyll go somewhere else because using your ATM isnt convenient. And the last thing you want to do is have somebody become upset because they went into your store for convenience and couldnt get it.

Tammie Kuhn, formerly of Western Reserve Group Inc., an ATM manufacturer in Willoughby, Ohio, said additional services at the ATM arent usually profitable for retail operators. Bill-payment and check cashing at the ATM, in my opinion, are bad, she said. The lines are too long. Its better to have a kiosk and an ATM side-by-side.

Harris agreed. In fact, his company and Louisville, Colo.-based Kiosk Information Systems Inc. expect to release several customer-customized, check-cashing kiosks in September. They are designed to stand alone or beside an ATM.

There are a number of motivations for c-store owners to have check-cashing kiosks that offer self-service, Harris said. First and foremost, using the kiosk takes the responsibility away from the clerk and keeps the clerk from being tied up.

Posted by keefner at November 26, 2005 02:54 AM