For decades, “cokes and smokes” ruled convenience stores’ operating model. Then foodservice and scanning brought a new age for retailers. Today, digital disruption is again transforming the way c-stores operate, pushing them to take giant leaps into new areas of operation like financial services to help customers manage money.
Much of these financial services revolve around the automated teller machine (ATM). No longer simply the “bank in a box,” as many nicknamed it at its birth — the same year as the first moon landing — the ATM’s utility is about to expand exponentially.
Bruce Renard, president of the Jacksonville, Fla.-based National ATM Council, outlined some of the most basic functions on the horizon.
For example, to date, most companies sending out rebates, refunds or rewards use checks or prepaid cards. But now, new systems can “allow you instead to easily send a code or a text message or an email to someone’s phone (that they can use to) securely locate an ATM and get cash for that payment,” he explained.
Integrating consumers’ handheld devices as a method of identification will also call for more stringent security measures, which the ATM industry is busy finalizing. Part of that security will involve bringing in biometric authentication, explained Renard. “We’ve been working for quite some time, and we have a standard in the works right now.”
That framework is in the hands of the Institute of Electrical and Electronics Engineers, whose members do the number crunching and deep dives into the operations and security of such systems.
Because of the more secure authentication and app-based platform,
Renard foresees unlimited uses that could become routine for ATM users.
More Functions, More Business
Joe Patel, who owns the Speed Mart chain in Crossville, Tenn., already sees the value of expanded functionality.
“We do have a phone card machine, which (provides) phone cards, gift cards and prepaid minutes; and then we have an ATM,” he said.
Now, he’s ready to grow into more financial services. “I am looking into a kiosk that is stand-alone, which is going to offer all of that — bill pay, gift cards and all that together.”
Today, new ATM functionality frequently includes Bitcoin transactions. Advocates of the cryptocurrency cite its digital security via one-to-one transactions that exclude intermediaries, greatly minimizing opportunities for fraudulent uses.
When Mario Spina, owner and CEO of The PRIDE Stores, with 16 locations throughout Chicagoland, switched to a new ATM provider, he wanted the machines to offer the Bitcoin option.
“You hope that people realize that they have some Bitcoin functionality in our locations, that they’ll come in and check out the stores and hopefully purchase other items,” Spina explained. “Or check out our location for the first time and then come back again.”
Some c-store retailers offer both standard ATMs as well as stand-alone Bitcoin machines. Spina installed the Bitcoin-only terminals in three of his PRIDE Stores. Speed Mart’s Patel said the Bitcoin kiosks in all seven of his locations have brought in new business.
“We have noticed all the customers that come and use bitcoin, they are brand new faces to the store,” said Patel. “And whenever they’re using bitcoin, they’re obviously shopping for fuel or gas or any groceries or cigarettes with it, so that’s increasing the volume there, too.”
Patel initially saw the kiosks at a large trade show, mistaking it for an ATM. But after doing some research, he realized the advantage they could bring in added transaction revenue.
Some Bitcoin kiosk providers offer a flat, nominal monthly payment and maintenance in exchange for the store’s location. Others, though, offer a percentage of each transaction – the main reason Patel chose provider DigitalMint. Those are uncapped payments, by the way.
“Before we chose DigitalMint, we saw another two or three companies. … They were only offering a $100 or $200 (monthly) or something close,” Patel said. “And this company offered partnership.”
PRIDE’s Spina said he prefers not to own the machines, leaving the maintenance headaches to the industry professionals. “With technology changing so often, as well, it’s better, we feel, just leave it in (ATM provider’s) hands for the time being,” he said.
Same Gift, Less Card
The added functionality of ATMs and kiosks may soon streamline another digital-enabled product that c-stores are now offering — the branded gift card.
“We sell gift cards at our locations,” Spina said. “Amazon gift cards, Apple gift cards, all those items. We sell the fuel gift card of whatever brand of fuel we sell at that location. … And we also have our own PRIDE Stores gift card that we carry.”
Ideally, Spina would like to tie all of those things together with one handheld device application. The PRIDE Stores is developing an app to allow customers to link their PRIDE gift cards and their credit/debit cards as a form of payment, as well as link their loyalty account to the app.
When choosing a partner to create an app, Spina’s advice to other retailers is to be clear about expectations and don’t be afraid to ask questions.
“Ask for a list of people that they do business with,” Spina advised. In addition, talk to other retailers and research companies online for independent reviews on the provider’s services.
After all, financial services offer a huge growth opportunity for c-stores. Identifying the right partner to help you navigate this new terrain is key to success.