The Unlikely Story of the Reverse ATM

Tuesday, September 12, 2017

By Financial Health Network

Hamed Shahbazi is the Founder and CEO of Tio Networks, a multi-channel payment solution provider specializing in bill payment services and other financial services through a variety of automated self-serve, retail point-of-sale, mobile and web-based methodologies processing approximately 50M transactions worth roughly $6 billion in payments annually in the United States. Mr. Shahbazi has been particularly interested in developing payment products that are safe, viable and commercially reasonable alternatives for the LMI (low to moderate income) and underbanked demographic groups. Below is a transcript of his speech at EMERGE 2017.

Thank you very much. When Financial Health Network first contacted me to talk about the TIO journey, they referred to it as the unlikely story of the reverse ATM. And that’s probably because of our early work and sustained work with cash-accepting, self-service, automated kiosks. But as I reflected on our journey, I noticed a relentless entrepreneurial focus on impact, and that led me to consider a different big idea which was our road as impactpreneurs. Let me explain.

When we founded the company back in 1997, it was not called TIO Networks, it was called Info Touch Technologies, and it didn’t offer bill payment services. Our first kiosk devices were designed to provide Internet access, and they were designed to cure a different type of digital inclusion. It was the digital divide and not financial health. But it was impact-oriented, and this was very much a focus on the LMI. Initially, this was very successful and impactful, but as the Internet became more commoditized, our ability to impact the customer faded, and as a result, we decided to pivot.

Our First Pivot: Or, Why the Feedback Button is Necessary

With Circle K, we developed a kiosk program where we tried everything. This kiosk had the ability to sync your PalmPilot [laughter], allow you to check your email — yes, those things. As you can see, there’s a handset on it which allowed for video teleconferencing. Yes, back in 2001 [laughter]. But it was bill payment services that we added in 2002 that really resonated with the customer. And right there in Circle K in Phoenix, Arizona, we had created our product market fit. Why? Through this kiosk, we allowed people to get immediate credit for their bill payment, so no wait time. This was because of our back office integration into the biller’s billing system. We were quite encouraged, we added hundreds of kiosks in multiple markets, and to this day the learnings that we had from this kiosk program in Circle K have powered a lot of our thinking in many other channels and into the many billions of dollars worth of bill payments that we process today.

One of the interesting things that we did with the kiosks was we put a button on the kiosk interface that anyone could use, and this was called the feedback button. If you needed help with the kiosk, or if there was a biller that you wanted, or if you just wanted to tell us off, you could [laughter]. And that feedback button worked very well. And because we didn’t have any kiosks in the city that our employees operated in, Vancouver, British Columbia, we had those messages from every single kiosk go unfiltered to every single employee at the company. Yes, a little dicey, but once in a while, we would get a message that would really knock our socks off.

Our Customers Tell Us: Your Product Gives Me Dignity

We found that customers would tell us once in a while that the kiosk really made a difference to them. Our kiosk was not judgmental. our realization was that this kiosk, for a very small use case in paying your bills, something as perfunctory as that, was giving people back a little bit of dignity. And so we coalesced around this concept of dignity. We coalesced around this concept that one of the prevailing themes of our product was that it made people feel a different way, and it was impactful in that it changed the way that technology worked for them.

So because of that, we changed the name of the company to TIO to us, it was indicative of our brand promise: to provide a high-quality service and to ensure that we supported these customers, provided a higher standard of care. We provided 24/7 customer service. We created an experience on our kiosk program for Spanish users. We did everything we could to elevate this customer and to let them know that we were watching their back.

Our Next Pivot Allowed us to Scale, Partner, and Grow

So from ’02 to ’06, all we did was self-service, automated kiosk bill pay. That was what we were singularly focused on. In ’06, we decided to take the key tenets of success behind the bill pay program — the immediate posting, the high quality of customer support — and apply that to a less capital-intensive deployment model. So we developed the over-the-counter program or what we called TIO Express at the time. This allowed us to scale the business and drive a lot more transactions

Partnership was a really big part of our success, and we were very fortunate to have great partners. Financial Health Network is one of those great partners, and I really want to thank Jennifer and the entire team at Financial Health Network.

But partnership was a bit part of our growth. We partnered with our billers, companies like Softgate Systems and Global Express extended us into their retail payment networks. We later acquired those companies and included them as part of our network.

Our “Overnight Success” Took Two Decades, Built on Customer Impact KPIs

So this was not a quick journey. This was a long, windy road. Our overnight success took about two decades. We achieved pretty substantial total-processing numbers. And this is our 2016 numbers: millions of accounts, millions of consumers.

But I think it’s easy to lose sight of the fact that behind each one of those numbers is a human face. And to this day when we have a management meeting, we always start with our customer impact KPIs.


We Found Like-Minded Partners at EMERGE and in PayPal

So a lot of people ask us since our announcement with PayPal, how and why did the PayPal deal come along? First of all, let me just say that we are incredibly excited to join PayPal. We don’t know of another Fortune 500 or Fortune 250 company that has the same breadth and strength, that cares as deeply as they do. Not as a hobby, but as a core focus on financial health and financial inclusion. This picture is from last year’s EMERGE. I was in the audience in Louisiana and for the first time listening to Dan speak. I was blown away. And it really occurred to me that this was a special company with a special mandate. Here’s a company that is spending real resources to go after this marketplace and to really build products and solutions that serve these customers. So stay tuned. There’s a lot of good stuff coming.

We live in an interesting time. We live in a special time. There’s a lot of pain out there. And I’m sure you all agree that there’s a lot of opportunity to impact those consumers in a positive way. And so there’s never been a better time to be an impactpreneur. Thank you.

MetLife Foundation is a major sponsor of Financial Health Network’s ongoing consumer financial health work.

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