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7-Eleven expands e-financial services

The traditional convenience-store chain 7-Eleven has expanded testing of Vcom--the company's foray into electronic financial services.

Traditional convenience-store chain 7-Eleven has expanded testing of Vcom, its financial services kiosk.

The company will install a Vcom machine in 36 stores in Ft. Myers and Naples, Fla., as part of a pilot program that was launched earlier this year in Texas.

Vcom is part of 7-Eleven's foray into the electronic financial services sector. The company is hoping to turn Vcom into a gateway for customers to access a range of financial services.

A little larger than an ATM, the Vcom offers such services as ATM, money orders and money transfers. Eventually, the Vcom will cash checks for customers and possibly also offer online shopping.

Dallas-based 7-Eleven, which sells $4 billion worth of money orders and sees 120 million transactions a year at its ATMs, according to spokeswoman Margaret Chabris, is only the latest entry into electronic financial services.

Although Chabris said 7-Eleven figured that customers without bank accounts would be the ones primarily using Vcom, the company was surprised to find out that even bank account holders used the service because of its convenience.

The land grab going on in the sector is heating up as a host of companies, many with little experience in financial services, step into the category. Analysts have touted the sector as one that is proven to be a hit among consumers.

The online banking industry, for instance, was valued at $1.5 trillion last year and is expected to be worth $2.1 trillion this year, according to Internet research company Jupiter Media Metrix. Jupiter predicts the sector will grow to $5.4 trillion by 2005.

It remains to be seen, however, whether consumers will turn to a general retailer to handle such services as banking, brokerage or mortgage lending needs.

With more than 21,000 locations in the United States and 19 other countries, 7-Eleven is the largest U.S. convenience store.

To supply most of the financial services, earlier this year 7-Eleven struck partnerships with American Express to provide the ATM services; Western Union to fulfill money transfers and Equifax will oversee the check cashing that will probably be offered later this summer, the company said.