News

Function at a junction

A Dove Consulting survey indicates that consumers are interested in multi-functional kiosks – but only at the right price.

November 27, 2000

Convinced that consumers want to do more than get cash, the ATM industry is investing a considerable amount of time, money and effort into bringing advanced functionality to its machines.

Until recently, however, manufacturers, deployers and others were going on little more than a hope and a prayer.

A study by Dove Consulting– and one statistic, in particular – may answer some of those prayers. Ann Schmitt, director of Dove Consulting, speaking at Thomson Financial's ATM 2000 Conference in Orlando, Fla., reported that 81 percent of consumers who responded to Dove's June 2000 survey said they would use a multi-functional kiosk if it was available to them.

Sixty-six percent of them would use a kiosk at least once a month, or 38 times a year on average. Based on those figures, Schmitt estimates the potential size of the self-service kiosk market is 2 to 4 billion annual transactions. That compares to the current 11 billion annual ATM transactions, the overwhelming majority of which are simple cash withdrawals.

One caveat: Schmitt said Dove's projections assume that multi-functional kiosks would be widely available to consumers.

Which products and services do consumers want? They are seeking applications to match their environment, Schmitt said, mentioning stamps at a post office and gift certificates at a shopping mall as examples.

Of the products and services included in the survey, "none of them hit the cover off the ball," she added, although those that could be delivered on the spot scored highest with respondents. The most popular -- including stamps, directions/maps, tickets, gift certificates and coupons -- scored at or slightly above the mid-point on a 10-point scale.

Schmitt was optimistic that interest in such products and services would grow along with consumers' exposure to them. "We got to five with very little real world visibility of services at this point," she said.

The most critical factor influencing a consumer's decision to use a kiosk was, by far, price. "The lower the fees, the greater the propensity to use the kiosk," Schmitt said. Seventy-one percent of respondents indicated they would pay a 50-cent fee. That number dropped to 53 percent if the fee increased to $1 and 35 percent if the fee was $1.50.

Thirty–four percent of respondents believed it was reasonable to pay a fee for financial transactions such as wiring money or cashing a check, while only 23 percent felt it was reasonable to pay for e-commerce activities. That disparity could be due to the fact that "a lot of what the Internet makes available is free today," Schmitt said.

Perhaps most heartening to the ATM industry, 19 percent of survey respondents ranked ATM features as important to their decision to use a kiosk, ahead of email access (14 percent), the capability to purchase products (13 percent) and news access (6 percent).

"The whole notion of a pure-play e-commerce kiosk really doesn't resonate well with consumers," Schmitt said.

Waiting in line -- a major concern of ATM deployers -- was mentioned by only 5 percent of respondents, even when the wait time was as long as 2 minutes.

Respondents would not feel comfortable conducting lengthy or complex transactions on a kiosk, however, largely due to security and privacy concerns. Schmitt said consumers still prefer to conduct those transactions via a PC in their home or office or at a bank branch.

As for location, "consumers expect to see (kiosks) in locations they frequent as part of daily life," Schmitt said, including shopping malls (91 percent), airports (83 percent) and hotels and restaurants (74 percent). Surprisingly, only slightly more than half of the respondents mentioned freestanding retail stores.

Respondents tapped Internet service providers as their preferred kiosk deployer, largely based on the belief that ISPs possess more technology and online shopping expertise. Consumers also believed ISPs would charge lower user fees than either banks or retailers.

They want screens that resemble standard ATM screens, for ATM transactions, or Internet screens, for e-commerce/Internet transactions. Most respondents expressed a desire for either a touch screen (67 percent) or a mouse and keyboard setup (16 percent).

Less may be more where content is concerned. While survey participants were given the option of selecting up to eight types of content they would like to be shown during a transaction, they selected less than two on average. Most popular with respondents were news headlines and market updates (54 percent), weather and traffic updates (50 percent) and special coupon offers (30 percent).

Profiling a "typical" likely kiosk user was an elusive task, Schmitt said. "There really was no Mr. and Ms. Web-enabled ATM."

"Successful deployment appears related to niches," she added, with pricing, convenience and security among the major issues that deployers must address.