June 20, 2010

TIO set for Canadian expansion

By Robin Arnfield, News Editor

VANCOUVER--Multi-channel bill payment processor TIO Networks is expanding its operations in Canada. The Vancouver, British Columbia-based company had until recently concentrated its activities in the U.S. where it provides bill payment and prepaid mobile phone top-ups at 21,000 automated kiosk and clerk-assisted locations.

Now TIO has signed a deal with new Canadian 3.5G wireless carrier Mobilicity to provide cellphone account payment and activation at 250 dealer locations across the Greater Toronto Area (GTA). The service will be provided via TIO’s PC-based point-of-sale software and processing system, TIO Express,

Mobilicity is a mobile operator that uses its own telecommunications infrastructure. Following the GTA launch, Mobilicity says it intends to set up operations in Vancouver, Edmonton, Calgary and Ottawa later in 2010. Payment processing and activation for Mobilicity dealers in these locations will be provided by TIO, says Hamed Shahbazi, TIO’s Chairman and CEO.

TIO has set up a Canadian electronic fund transfer (EFT) network for authorization and settlement with an un-named Canadian bank. Ramping up the operation and offering the TIO bill payment service in new locations and to new billers will not be a problem, says Shahbazi. He points to the scale of TIO’s operations in the U.S., where the firm provides bill payment processing services to landline telecom, wireless, cable and utility billers such as AT&T.

If it wishes, Mobilicity could use TIO’s new mobile payment platform and mobile payment apps for smartphones.

In May 2010, TIO announced a contract with Pacific Gas and Electric Company (PG&E) to offer smartphone-based bill payments to the utility’s 6 million customers in central and northern California.

The mobile payment service, due to be rolled out in August 2010, will be of interest to people on the move who welcome the convenience of using their smartphones for paying bill before the due date, says Shahbazi.

To use the service, customers will have to load a TIO application onto their smartphone and specify their payment method – credit/debit card or bank account transfer.

“Because we integrate directly with the biller’s back office via our mobile platform, we can get payment notification to the biller very rapidly,” says Shahbazi. “This means that customers can pay at any time and avoid late fees.” He contrasts this expedited payment service with paying bills on the Internet where settlement typically takes two business days.

David Lott, senior vice president at US consultancy Speer & Associates, considers TIO to be a major player in the North American third-party bill payment aggregation industry. Extending its bill payment service to smartphones will allow TIO to achieve lower processing costs and engage a different segment of the market, people who have a bank account or payment card, Lott says.

“TIO was initially focused on self-service kiosks where under-/un-banked individuals could enjoy the convenience of making payments to their utility company, cellular provider in one location rather than having to travel to each individual company location,” Lott says. “With the higher capital/maintenance costs associated with the kiosks, TIO developed its clerk-assisted TIO Express service where customers make their payments directly with the help of the clerk who uses specialized software to accept the payment.”

Lott says that the third evolution in TIO’s business model is the use of mobile phones as the payment device, with the goal of achieving even lower processing costs than either kiosks or clerk-assisted payments, and targeting banked consumers. “TIO has covered all the bases in terms of its various bill payment channels for both banked and un-banked consumers,” he says.

Whatever the channel used by the consumer, at the back office TIO consolidates all the payments for each biller and passes an electronic file with all the necessary payment information to the firm. “This enables efficient processing by the company and reduces its costs associated with handling payments manually with its own resources,” Lott says.

“The key to success for the kiosk or TIO Express service is getting a critical mass of billing companies in a particular market to draw traffic to the payment location. Retailers such as convenience stores are willing to participate in the belief that bill payment customers will make merchandise purchases in the stores or develop a loyalty to that store brand/location for future visits. Similarly, the key to success for the mobile application is getting enough billers to participate to the point where the consumer sees benefit in the service.”





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