Enhance the vending experience with contactless payment technology

How many of you have used your phone or “swiped” to pay in the past two years? Before 2020, this number will be quite small. However, the pandemic has forced many of us to change the way we do things, including shopping. Many of us started shopping for groceries online and opted for delivery or pickup. In stores, others may have already started using card information stored on their phones to make frictionless payments. At first, this was for hygiene reasons, but now, consumers prefer contactless payment methods just for convenience. That’s the key – convenience.

The vending industry is arguably the leader in consumer convenience. Whether at work, the gym, or traveling, consumers have access to food and beverage options through vending machines and micro-markets. But has the industry kept up with the way consumers are more willing to pay?

consumer trends

Visa found in its 2021 Return to Business study that more than half (56%) of consumers use contactless payments whenever possible. Those surveyed also found new expectations around store payments. In fact, using a credit or debit card is the most anticipated contactless option for consumers (62%), followed by mobile payment apps (41%) and mobile wallets (37%). According to the study, “The use of contactless payments has become part of the public health response to COVID-19, but the convenience, safety and reliability of these payments will undoubtedly reinforce longstanding habits.”

Data from the vending industry in particular also found these statistics to be true.

Earlier this year, Cataloupe Inc. partnered with Michigan State University’s Broad School of Business to study payment trends in unattended retail. The study analyzed a sample set of 160,000 Cantaloupe ePort cashless devices across various market segments from January 2021 to October 2021 and found that the overall share of cashless transactions increased from 51% in January 2020 compared to cash transactions 62% by October 2021. It was 49% to 38% over the same period. The study also found that from January 2020, 18% of cashless transactions were contactless.

By October 2021, contactless transactions had increased to 43% of total cashless transactions. Sean Feeney, CEO of Cantaloupe, noted in a company announcement in August: “When we analyzed the entire network of devices throughout the first half of 2022, we found that contactless payment methods accounted for nearly half of all non-cash transactions. These trends do not Slowing down. Data suggests that by the end of 2022, more than two-thirds of transactions will be cashless, driven by consumers’ greater willingness to use touch. The importance of offering contactless payment options to increase revenue and remain competitive.”

The company reports that the rise of cashless payments is being driven by consumers’ adoption of contactless payments (any payment method that uses NFC or RFID technology to “tap to pay”), including chip cards or mobile wallets. Based on the data, the study predicts that contactless payments will grow by another 31% in 2022.

Contactless Payment Solutions

Manufacturers in the industry have been leading the way, offering advanced contactless payment technology to keep up with this change in buying behavior.

Cantaloupe announced earlier this year that it would integrate Vendekin’s Retrobox, a patented hardware-enabled SaaS product that makes vending machines touchless and smart, providing consumers with a frictionless experience.

Launched five years ago, Vagabond’s vĪv contactless payment platform technology allows payments to be made with its original telemetry device. “We already had our own telemetry device and had so many options for credit cards that we already had so many good options that it didn’t make sense to create a credit card reader,” said Juan Jorquera, vice president of sales and marketing at Vagabond. “So, we thought, ‘Why don’t we create something different? Make our telemetry device more powerful and allow it to accept payments. The added benefit is that it lowers the cost for our customers because the cost of the device is just a credit card A fraction of the cost of a card reader.”

The telemetry device itself plugs into the machine controller board and is able to communicate with the processor and machine to make the coils turn. “So the consumer pays the machine via the phone, the machine verifies the credit and sends a signal from the telemetry to the machine controller board, saying, ‘Yes, you got the payment, turn the coil,'” Jorquera said. “It’s all about Credit to the backend vending management software we built with Vagabond. Without it, we couldn’t have created the touchless technology.”

Last year, Manuel Barrios, the Florida operator of CVM Services Inc. Deciding to take advantage of the opportunities presented by contactless technology, he upgraded certain accounts using Vagabond’s vĪv contactless payment platform. Barrios has deployed vĪv in every vending machine managed by Bethune-Cookman University (B-CU) in Daytona Beach, making it the first university in the United States to offer fully contactless vending purchases. Not only did he replace the existing card reader and telemetry with the Vagabond vĪv Insight device, he also removed the ticket validator and coin mechanism, making the machine completely contactless.

B-CU students and staff benefit from this change by viewing products in machines remotely, accessing nutritional information remotely, experiencing contactless secure purchases, and getting product discounts through vĪv, including a free plan for first-time purchases.

Other manufacturers are also offering a completely touchless experience. For example, PayRange offered contactless payment options long before the pandemic. Using the company’s BluKey device, consumers can make product selections without touching the machine. PayRange also provides consumers with multiple payment methods; it is compatible with all major credit cards and digital wallets, and from early 2022, adds the ability to accept store gift cards and cryptocurrencies.

Vendors Exchange’s VE Touchless uses a closed loop between the user’s phone and the machine to provide customers with options for a contactless vending machine experience. Customers use their mobile devices to scan the QR code on the machine, make selections, complete the payment, and enjoy shopping without touching the machine. Operators can upgrade their UCB or non-UCB machines with these touchless vending machine kits.

To provide a cash and cashless experience, earlier this year at the NAMA Show, Nayax launched EasiFit, a ticket verification toolkit that allows cash and cashless payments to be accepted, and works with Nayax’s cashless payment solution, VPOS Touch use. The solution allows accepting cash and cashless transactions from one location on the operator’s machine. “The beauty of this solution is that operators can use our flagship device, the VPOS Touch, coupled with a simple proprietary adapter that allows In a machine from the same knockout… VPOS Touch and all the benefits of the operator’s favorite Nayax platform like full EMV certification, multi-vendor without extensive pre-authorization, a full platform of loyalty and discount campaigns, and The remote price change feature can now be easily installed on the bill validator.”

Is contactless technology worth the investment?

While the pandemic has helped push more people to use contactless payments (many are starting to use the technology for the first time), convenience is what keeps it going. Juan Jorquera agrees — at this point, contactless technology is for convenience, not hygiene.

“It’s about consumers having a better experience,” he said. “Contactless offers a lot of opportunities to elevate the unattended retail industry to behave like any other retail industry where we actually have access to the final data.” He pointed to other retailers such as grocery and convenience stores . “Any other retailer is using data from actual sales to understand what products to stock. They predict Sally will buy something because they know Sally has bought a few items in the past two weeks,” he said. “Most operators don’t know who’s buying what, and it’s more of a passive sale than an active sale.”

Jorquera said that with Vagabond’s contactless technology, operators can see exactly who is buying what and can start targeting specific products to specific customers. “We can discount and change prices remotely,” he said. “We can send promotions like ‘If you pay with contactless payment, you can get a discount.'”

However, the question surrounding contactless payment technology is how long it will take for the technology to become the new normal. Jorquera believes that consolidation in the vending industry will take longer than other channels. “I think there’s always been a disconnect between what consumers want and what operators want to invest in,” he said. “Consumers think it’s one of the coolest things when we install contactless hardware in any way. They love the fact that they can browse what’s in the machine before they even get close to it. But so far We found that many operators think that [this technology] As a novelty rather than a need. If you put technology in front of consumers, they will always accept it. If you put it in front of the operator, they will be more hesitant. “

The challenge for Vagabond is to meet the needs of both consumers and operators. To that end, the company is releasing its own credit card reader with vĪv technology built in. “Contactless will be an option for cashless hardware,” Jorquera said. At this point, carriers aren’t making buying decisions based on whether the tech hardware is contactless, he said. Therefore, credit card readers with built-in contactless capabilities give operators the opportunity to determine when or if contactless technology makes sense in a particular location. ■

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