Business Editors & High Tech Writers
HOUSTON--(BUSINESS WIRE)--January 22, 2002
Tidel Technologies, Inc. (Nasdaq:ATMS) and CashWorks, Inc., a financial technology solutions provider, today announced the execution of a strategic license, development and deployment agreement to distribute CashWork's ground-breaking automated check-cashing system, PayPort(TM). As part of the arrangement, Tidel also agreed to invest $1500,000 in the form of convertible debt of CashWorks, in exchange for certain marketing rights and future income payments.
Mark K. Levenick, COO of Tidel, said, "The U.S. market for non-bank financial services is estimated to exceed $30 billion annually. This alliance with CashWorks facilitates Tidel's entry into this exciting arena and enables us to expand our horizons beyond hardware manufacturing. It also differentiates our mainstay products from the competition, and provides our distributors with a value-added revenue stream to offer their customers."
The parties commenced the first pilot test last week, and expect to install up to a total of twenty-five (25) pilot locations before full deployment begins in the marketplace later this year. The technology is designed for use at both new ATM installations and the more than 155,000 ATMs currently installed in non-bank locations in the U.S.
Ken Rees, President of CashWorks, said, "We are excited to partner with Tidel, and we believe their technical expertise and sales support will allow us to quickly expand our network of locations offering the PayPort system. Our check-cashing system, which is unique, cost-effective and, most of all, simple to own and operate, has eliminated the need for expensive, special purpose machines or brick-and-mortar check-cashing locations."
According to Levenick, "Check-cashing services typically generate fees that far exceed those for cash withdrawals at an ATM, and now they can be conducted in about the same time. Any retail location with a Tidel ATM can substantially improve its profitability overnight with the simple addition of a point-of-sale terminal. In addition, we expect that the increase in fee income offered by PayPort will broaden the base of potential ATM locations by including some locations that couldn't otherwise be profitable with an ATM alone."
Levenick added, "We believe that CashWorks, Inc. has the technology and management team to become a significant player in this space. We have structured our financial relationship so that we can convert our debt into a new issue of preferred stock of CashWorks upon the achievement of certain milestones."
The PayPort system allows any retailer with an ATM to provide check cashing and other non-bank financial services, such as payday advance loans and money transfers, through the addition of a PayPort point-of-sale terminal at the counter. The PayPort terminal will be used by a store clerk to scan the check and identify the customer, and automatically authorize the retailer's ATM to dispense an amount of cash for payroll and government checks up to $1500 per check.
