Cash payment kiosks in the United States are increasing despite the digital age

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Municipal governments across the country are joining a trend to provide more cash payment options to consumers looking to pay their bills, with Chicago embarking on significant expansion and New York installing new kiosks for the first time next month.

Cities receive more revenue when consumers have additional means to pay for tickets and parking taxes, while residents benefit from well-placed terminals that do not charge them fees and have access to their data.

Chicago installed 30 more kiosks this summer under a contract with kiosk and software provider CityBase, and plans to have 119 kiosks in the city by next June, up from 74 now.

Once the additional kiosks are installed next year, the city will have achieved its goal for now of placing them in each of its 50 neighborhoods, City Comptroller Reshma Soni said in an interview on Tuesday.

Surprisingly enough in the age of digital solutions, cash options are generally on the rise. A multitude of companies, such as PayNearMe and Green Point, are looking to offer more cash payment options, including at stores such as Walmart and Family Dollar.

Chicagoans can use EZ-Pay machines to pay City parking tickets and citations as well as business taxes and city utility bills such as water, cash or check as well as credit, debit and prepaid cards. CityBase is also the provider of the Chicago online portal doing the same.

“Accessibility is an essential part of the quality of everyday life,” said Soni, explaining that the city is trying to make paying bills less burdensome when it comes to locations and fees. “It’s a global push with this mayor.”

She refers to Chicago Mayor Lori Lightfoot who won the election for this post in 2019 after his predecessor, Rahm Emanuel, failed to seek re-election in the country’s third largest city. Yet it was under Emanuel’s administration that Chicago awarded kiosk company CityBase a $ 5.7 million contract in 2017 to deploy the kiosks.

“CityBase kiosks provide our customers with real-time information on their balance, helping them avoid fees and penalties,” Soni said in a press release this week regarding the summer expansion. The other benefit is that self-service kiosks reduce contact between users and staff as the deadly COVID-19 pandemic continues to impact residents, the statement said.

Chicago-based CityBase, which facilitates payments on behalf of Chicago and other municipalities as well as utilities, will also begin placing kiosks in New York next month with options to pay for car tickets, said the Company CEO Mike Duffy.

“We are creating a new platform for these governments and utilities to interact with what is one of the hardest to reach demographics,” Duffy said in an interview Tuesday.

Those who choose to pay in cash are often low-income and might otherwise pay $ 2-6 per transaction elsewhere, he said. Duffy estimates that about 27% of Chicago households, or roughly 260,000 households prefer to pay in cash for whatever reason.

“They have fewer options and historically the onus has been shifted to them,” Duffy said.

In Chicago, the city and the company have teamed up to place kiosks at city libraries and police stations, placing them in lobbies and hallways. Their goal was to choose places where people could access them for a wide range of hours (police stations are open 24 hours a day) and where they would feel safe using them, Soni said.

She points out that there is no cost to using the kiosk to pay bills in cash. This is a significant saving for residents who might otherwise be charged per transaction at local commercial outlets. If residents use a credit card at kiosks, they will pay the same 2% card interchange fee they would pay if they made payments online.

“The good thing about it, thanks to the deal, is that CityBase is the one that covers the cost of the kiosks,” she said.

Still, Chicago pays CityBase a $ 1 fee for each transaction, and if a kiosk doesn’t have at least $ 425 in activity per month, the city will make up the difference. Other than that, the only other cost is employee overheads at around $ 200,000 per year, she said.

Duffy declined to comment on CityBase’s profitability. In 2019, it merged with other government software service providers to become part of GTY Technology Holdings, a publicly traded company. A regulatory filing by the parent company shows that CityBase generated $ 8.9 million in annual revenue last year, surpassing its $ 6.7 million in annual costs.

CityBase isn’t the only company selling kiosk services. Payments in the United States based in Tulsa, among others, also deploys such kiosks, although they all vary depending on whether they serve municipalities, private companies, such as utilities, or both.

CityBase is a significant player with kiosks in eight of the 20 largest cities, Duffy said. One city that is not yet in the corporate fold is Los Angeles, but Duffy hopes to change that very soon.

Correction: The story has been updated to correct the number of Chicago households that prefer to use cash.


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