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AUTOMATED KIOSKS WIDEN PAYMENT OPTIONS
BY ABDEL AZIZ NOSSEIR
The ATM revolutionized banking by allowing clients to access their money without having to visit their bank. Bill payment kiosks have a similar goal, allowing people to carry out financial transactions, pay their utility bills, recharge their mobiles and even purchase bus tickets from a single machine. Think of them as ATMs on steroids.
The self-service kiosks let companies outsource bill collection and augment their point-of-sale network, while offering customers the convenience of location. They are usually positioned in high-traffic areas such as metro stations, shopping malls, universities and sporting clubs. Chances are, you’ve seen at least one.
The tall blue E-ZEE machine is the most recognized brand, with at least 50 locations in Cairo and Alexandria. The touchscreen monitor provides a menu with instructions in English and Arabic. The machines let users pay telephone and Internet bills, carry out simple banking transactions and access e-government services. The kiosk is also a point of sale for various prepaid phone cards (for mobiles, payphones or fixed-line phones), mobile ring tones and bus tickets. Other products such as mobiles and appliances can be purchased from virtual showrooms and delivered to the buyer’s home.
E-ZEE machines accept payments by cash, debit card or credit card – transferring the payment instantly to the hosted service’s accounts. “All E-ZEE machines are connected with the servers of companies that we provide payment services to,” explains Samir Rostom, assistant sales manager of Integrated Payment Solutions (IPS), which owns and operates the machines. “Accordingly, processing any transaction through our machines has an immediate effect in the records of the [payee]. After any transaction, the machine presents a receipt, stating the date, time, details of transaction and the service.”
Citibank has its own version of the bill payment kiosk, the EDM machine, or “Lockbox.” The freestanding machine looks like an ATM, but is designed primarily as a bank for the unbanked. “An ATM helps customers with their banking in inquiring, withdrawing cash and transacting from their own bank account, whereas the Lockbox helps them mainly to pay their bills by depositing cash without the need to access an account,” explains Haytham El Mayergi, Citibank Egypt’s head of global transaction services.
Unlike some ATMs offering similar bill-paying services, the Lockbox is available to all users, not just Citibank clients. More than 50,000 people a month use the kiosks to pay in cash for telephone and Internet bills, credit card payments and insurance premiums. Printed receipts are issued for all transactions.
Users place the banknotes in an envelope and insert it into the machine. Digital cameras with high-power zoom, similar to the ones employed in Las Vegas casinos, monitor the cash count. “This process is [done] under strict security measures including a high-resolution video cam,” says El Mayergi. “We can even see the serial numbers on the banknotes.”
The Lockbox accepts even worn and torn bills, provided the quantity is correct, making the chance of a banknote being rejected highly unlikely except in deliberate attempts to defraud. Rejected banknotes are not included in the count.
The main benefit of the Lockbox is convenience, says El Mayergi. The bill payment kiosks are open 24 hours a day, and provide customers a quick, accessible payment solution, without the long queues or having to schedule and wait for cash collectors. “Some might like to wait at home, calling one collection agent to come and collect one bill, and another agent for another bill and so on, and then wait for all of them to come,” he says. “While for others, it is better to go to one point during their shopping and finalize all bill payments in one shot.”
For Mohamed Hamed, a librarian who commutes from Helwan to his workplace in Cairo five days a week, having bill payment kiosks in the main metro stations is a convenience. “I’ve used the E-ZEE machines to recharge my mobile phone,” he says. “It was an easy transaction, especially as there was a [company representative] by the machine to show me how to use it.”
Some people, however, are wary of the automated cashiers. “I don’t like to deal with a machine when it comes to money matters,” admits Heba Hamdy, a housewife. “I’m afraid that the machine might swallow the money and then it ends up that the bill is not paid. I would prefer to conduct the payment with a human being whom I can talk to.”
Unlike cash collection agencies, which usually tack a collection fee onto the client’s tab, bill payment kiosks collect a commission from the companies they represent. “Compared to the cash-collecting companies, our charge is lower,” says Rostom. “The individual client pays only the exact amount of the bill and nothing more. For instance, if a client is paying their Internet bill, they pay the precise amount of the bill without any additional charges. We take our commission from the Internet service provider.”
Nor is a heavy cost passed onto the companies, as the kiosks require less labor and logistics to collect payments. According to El Mayergi, Citibank charges only a nominal fee to clients for processing payments. “It’s very competitive, and it depends on the number of transactions, as well as the number of special processes and customized modifications needed by the company.”
He says companies often prefer to outsource their bill collection because it allows them to focus on their core business. “Our customers rely on the Lockbox as a mass collection product to achieve complete outsourcing of large volume collection with full automation.”
Karim Beshara, CEO of LINKdotNET, an Internet service provider that employs both E-ZEE machine and Lockbox services, would agree. “You cannot be a jack of all trades,” he says. “I want to give my customers the best service possible. But I also want to focus on what I do best, and it’s not bill collecting.”
The ISP’s decision to add bill payment kiosks to its wide range of collection options – which include payment at the company’s branches, home collection and online payment – was the result of customer dissatisfaction with the cash collection companies it outsourced to. Beshara was concerned that customers would associate the performance of the collector with the quality of the ISP. “We cannot control whether the cash collector is a nice guy, talks to our customers in a nice manner or, most importantly, is there on time,” he says. “We received many complaints in that regard and the process itself was unsatisfactory.”
Moreover, Beshara continues, collection agencies have capacity limitations that make them unable to cope with their clients’ business growth, while their fixed fees are more suited towards larger bills. “Collecting cash is not a stable model. They may give me 50 collectors this month, but the next month I may need much more than that,” he says. “And with the decrease in [ADSL] Internet prices, it does not make sense to pay LE 6 or LE 7 to collect a LE 45 bill.”
While LINKdotNET must foot the collection fees for clients’ payments received through the bill payment kiosks, Beshara says it is well worth the dozens fewer complaints he receives from customers regarding billing collection problems. “Do not underestimate the cost of management,” he adds. Managing the problems of 50 or 60 customers with payment problems is a big issue.”
He says there is no reason to add the small price the ISP pays for the outsourced bill collection to the customer’s bill. “We pay for it, and I’m happy to do it. It gets rid of a big headache, saves my image, makes my customers happier and makes me happy as well.”
But LINKdotNET has also encountered resistance from customers. “We used to hear people say ‘I’m not going to pay in a machine, I do not know how to do it.’ But bit by bit, things change,” says Beshara.
Home collection, which previously accounted for over 70 percent of LINKdotNET’s bill payments, has dropped off since the introduction of automated payment services. Home collection now accounts for 30 percent of bill payments, while 30 percent is at the ISP’s branches, and the remaining 40 percent is split between bill payment kiosks and online payment. Beshara expects to see this portion grow. “It’s a win-win situation. My customers are happy, and I get my money on time.”
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