TIO Networks Corp., a bill payment processor serving companies like utilities and cable providers, is taking an "if you can't beat 'em, join 'em" approach to mobile payments. The Vancouver-based company provides self-service payment kiosks within retail outlets, mostly in the United States, allowing consumers to pay bills conveniently and quickly.
TIO currently has more than 58,000 bill payment locations in stores like Best Buy and Circle K. It's a business that might seem like a prime candidate for disruption from mobile payment options; after all, if people can pay their bill from their phones, why would they make a trip somewhere to do it. But TIO Networks has begun a push to help its corporate customers turn smartphones into tiny little bill-payment kiosks on the go.
An app for PG&E
TIO Networks recently partnered with utility company PG&E Corp. to launch a mobile application that allows PG&E customers to pay bills and monitor their accounts. According to Laurent May, TIO Network's vice president of product development, the application for PG&E represents the first part of the long-term evolution of the company.
Calling it an exciting time for the company, May said TIO recognized the "absolute proliferation of smartphones" and saw the trend of more consumers using the devices. Since TIO is a multichannel player, May explained that all those smartphones simply represent another channel the company could use to reach consumers.
"What we're trying to provide is a unified consumer experience (across all channels)," May said, "and we see mobile as a companion experience."
So far the move into mobile bill payment has been a hit for TIO and PG&E. According to May, the PG&E application has seen double-digit growth month-over-month since its release, and TIO announced earlier this year the application is now one of the most downloaded free financial applications available through the Apple app store.
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May admitted the popularity of mobile bill payment will likely have some impact on its kiosk channel, but most of the growth is coming from converting customers who normally pay their bills through a pay-by-phone, interactive voice response (IVR) method. May said paying a bill over the phone is frustrating and takes considerably longer than paying a bill using TIO's mobile application.
"It only takes 20 to 25 seconds on average to pay a (PG&E) bill once a customer is set up (to use the mobile application)," May said. The mobile application is also extremely flexible and can be customized to create a more engaging customer experience.
According to May, the process of paying a bill is only part of what makes the company's bill payment application a success. Value-added services like push notifications and receipts are also important offerings available through the application. The application's adaptability may potentially even mean connecting it to new "smart meters" so customers will be able to monitor their accounts in real time.
Making bill payment portable
May emphasized the company isn't stopping with PG&E. The company is discussing creating similar applications with other utility clients and investing heavily in supporting mobile bill payment applications in general.
7 "Mobile is the next channel for TIO," May said. "We didn't set out to make a PG&E-specific application. We built out an entire platform to support it." The company has a very strong platform and willing partners, and even the rapid rate of change in the mobile payment market works to TIO's advantage, he added.
"There is huge amount of fragmentation in the market," May said. "These (mobile) channels are expensive to monitor. That's a competitive advantage for TIO because we can support them all."
May predicted that bill payments will likely represent a majority of the company's revenue in the near future.
Mobile won’t make kiosks disappear
Success with mobile applications doesn't mean that TIO is moving out of the kiosk business any time soon. Even if mobile bill pay impacts some of the company's kiosk business, smartphones are of limited use to one of its core constituencies: the unbanked.
"The main method of payment for the unbanked is cash," May explained. "You can't feed cash into a phone."
Mobile devices, especially tablet computers, are also converting some other customer segments as well. May believes payment applications on tablet devices are converting customers who might otherwise pay bills from their home computers. Using a mobile application to pay a bill on a tablet means those customers are TIO customers as well.
According to May, the devices make good, inexpensive, readily-deployable kiosks as well: "If you look at a kiosk deployment, it's obviously a much lower cost to deploy tablets, and much easier to deploy and develop for tablets." Using tablets to replace kiosks, he said, means kiosks with a smaller footprint and the ability to put in bill-payment kiosks where they weren't an option before.
For more on how bill payment processors are exploring mobile payment solutions, see "Mobile payment innovation: Managing personal finances through expedited payments."