About half of the vending machines in the U.S. accept cashless electronic payments. A report by Mercator Advisory Group says conversion of cash-based vending machines to ‘cash and electronic payment‘ machines lifts sales between 10% and 35% per machine. Exciting applications and technologies are available for the vending machine industry. Various influential trends for the future of the vending industry include cashless payments and smartphone payments known as the ‘mobile wallet transactions’.
In this blog, we will consider in more depth the rise of cashless payments and its impact on the vending industry.
Cash Payments
Most of the vending machines that exist today and for the past two decades are cash-operated ones. The customer has to slide in a currency note, and the vending machine will scan and accept their payment before purchase. Many cash-operated vending machines are also programmed to return change.
A common problem with this payment mode is that when there is insufficient change in the machine, the machine will not be able to accept dollar bills. Also, customers who do not have enough cash in their pocket won’t be able to purchase products from a machine that only accepts cash.
Coin Changer
In some businesses/stores, vending machines would take cash and dispense unique coins that can be used to purchase a different service or good. This vending machine mediates between the service/product received and cash payment. Gaming Arcades and Metro trains are examples of places using coin-changing machines.
Coin Acceptor
This mode is probably the oldest payment mode used by vending machines. Customers need to drop a currency coin in the provided opening, and the machine dispenses the product. This payment option is still being utilized by many vending machines today.
Cashless vending
As the world is becoming cashless at an increasing pace, it is no surprise that the vending industry is also a big player. It can be inconvenient if the vending machine takes only coins and dollar bills. Offering cash and cashless payments appeals to a broad customer base and increases the opportunity for larger sales.
Various Options in Cashless Vending
Card payments
According to research undertaken by Cantaloupe and Michigan State University, contactless payments at vending machines soared during the COVID pandemic period from January 2020 to October 2021. The payment mode of cards is booming, but it does not imply the end of cash. Yet, there is an indisputable rise in card transactions.
The vending industry has quickly adapted to this change, with an immense drive to update (or replace) coin-based vending machines and to integrate contactless payment terminals into the design of all new vending machines.
While inserting chip cards is a method widely used, contactless card payments trends will continue to advance.
Mobile payments
Mobile payments are rapidly increasing, and this has a significant impact on the vending industry. Research reveals that above 87 million people use Apple Pay globally, with competitor Samsung having about 34 million users. Apple Pay is supported by 5,480 banks worldwide as per an article by MoneyTransfers.com. According to the ‘Payments in Unattended Retail’ study findings, cashless transactions increased dramatically from 51% in 2020 to 62% in 2021, while cash transactions decreased from 49% to 38% during the same period.
Many countries are increasingly using mobile payments. So, what does this mean for the vending market? The answer is simple: vendors must cater to the need for mobile payments.
Connected digital accounts
Connected digital accounts are “closed” systems, most relevant to a workplace or school, where the customer base is consistent, captive, and regular. To explain, a customer will hold an account that is topped up through an online portal or by a central terminal.
Payments can be done at the vending machine using a smartphone app or a smart card. The cost of the product is then deducted from the customer’s account balance. This system is popular at busy events such as sports events, concerts, and festivals – where organizers want to centralize the payment process and avoid dealing with large quantities of cash.
Final Words
The vending industry is quick to adopt smart technology, and cashless payments are essential as a foundation for increased convenience.
Whether or not a society becomes totally cashless in the future, it is certain that contactless mobile and card payments are increasing. This is an opportunity for the vending market to boost sales, improve operational efficiency, and raise individual sale value.
Greenlite is a convenient and secure cashless system that will allow you to accept credit cards and mobile payments from your customers, while also being allowed to track your machine sales and inventory on backend software. We look forward to using our wealth of expertise to help you be most profitable throughout the evolution of cashless payment options in the vending industry.
Ref:
(20) How many kinds of payment methods are there in vending machines? | LinkedIn
What are the payment methods for vending machines? (haloo-vending.com)
