Cashless is by far the most common way of paying at vending machines.
Thanks to new contactless payment technologies, operators can add different cashless payment options to their machines to better serve customers.
A Michigan State University study found that adding a cashless payment system to vending machines increases revenue by 35% over 18 months.
In this article, we’ll break down four advanced cashless payment systems and explain which locations they suit best.
1. Digital Wallets for Vending Machines
Digital wallets are a type of online payment tool, usually in an app. The advantages of digital wallets for consumers are numerous.
Convenience is the most obvious one. They don’t need to carry their wallets or remember multiple bank card PINs.
All their debit and credit card information is connected to a single app. They can also save digital tickets and e-vouchers in the app to always have them at hand.
Moreover, consumer payment information is saved in a protected central location.
The card number is never stored in the app itself but is instead assigned a unique virtual number, protecting consumer money even if their smartphone is lost or stolen.
Since digital wallets sit within their passcode-protected phone, where payments are often possible only via fingerprint, they’re quite secure.
Different apps allow different types of access.
Open wallets enable online purchases and contactless in-store payments with most retailers and may even enable withdrawals at selected ATMs.
The most popular open wallets are Apple Pay, Google Pay, Samsung Pay, Pay Pal, and Venmo.
The benefit of open wallets is that they can be used anywhere and for any transaction.
Semi-closed and closed wallets allow certain transactions with a specific group of vendors or only with the vendor that issued the wallet.
Consumers can benefit from using such wallets since they usually have some sort of vending loyalty program integrated.
The more they use the wallet app, the more loyalty points they earn. There are also benefits for vendors, as they can learn quite a bit about consumer habits from the wallet usage data.
Here’s an example of how digital wallet payments work in MacJack, Televend’s own mobile payment app.
2. QR Code Vouchers
A QR technology, short for Quick Response technology, is a digital code used to store or link information. The QR code has become one of the most popular payment methods used worldwide.
In vending, QR codes are used as payment stickers that customers scan with their phone to complete a purchase in a mobile app.
Customers just need to scan the code without bothering to bring a credit card, have the exact amount of cash, or the correct paper bill.
Consumers don’t need to touch any surface besides their phones.
QR codes can be an effective promotional channel for vending operators.
For instance, operators can promote new products by distributing digital or paper QR code vouchers to consumers who earned them by interacting with a new product in a specified way, such as social media engagement.
A consumer can then scan the QR voucher at the machine and redeem it for a discount or free vend.
Companies can use the same method to distribute free vend vouchers to their employees, rewarding their good work and boosting a positive office vibe.
In vending, QR codes are used as payment stickers that customers scan with their phone to complete a purchase in a mobile app.
World Metrics reported that vending customers spend about 10% more on impulse purchases when there is a limited-time offer at the machine.
Keep in mind that 33% of customers will walk past the same vending machine at least three times per day, giving you the opportunity to turn them into customers.
Promotions with QR codes can be even more specific.
For instance, vendors can require consumers to buy a product in a classic retail store or machine and then generate a QR code at the receipt.
Consumers can then scan their receipts with the next purchase at the vending machine to access promotional discounts.
Note that these two types of QR code promo activities require a barcode scanner and a receipt printer integrated into a machine, adding extra costs to your machine setup.
3. Wearables
In recent years, the Near Field Communication (NFC) function has developed further than its typical use within bank cards and mobile apps.
Rapid technology development has transformed accessories into convenient and functional gadgets.
It’s becoming common to pay at vending machines using token rings, wristbands, bracelets, and smartwatches.
Companies love using wearables for cashless payments as a way of dispensing employee benefits through vending machines.
According to a survey published by the Compas Group, 77% of employees would come to the office more often if their employers gave them free food and drinks at vending machines.
This can also be applied to corporate break room micro markets.
Smartwatches, as we know them today, had first become popular when Sony launched their SmartWatch back in 2012.
However, the smartwatch market heated up with Apple and Samsung coming to play the following year. Besides smartphones, they remain the most popular gadget among tech consumers, making up 15 percent of the wearable technologies market.
Unlike smartwatches that are often bulky, wristbands, bracelets, and rings are much more toned-down and nonassertive.
The term wristband refers to a ribbon-like, silicone object that wraps around the wearer’s wrist like a bracelet. In contrast to wristbands that look simple, bracelets and rings have more varied designs and are more suitable for fashion lovers. They can be made of a combination of metal, rubber, silicone, and wood.
Since many vendors already have installed NFC readers to support other cashless options, accepting wearable payments doesn’t generate additional investment costs. On the other hand, the benefit for consumers is immediate adoption and convenience – they use the familiar technology to perform one additional task.
4. RFID Payment
RFID stands for Radio Frequency Technology, which includes two counterparts – a reader and a tag.
A reader uses radio waves to identify an RFID-tagged object, such as a card or other wearable, within a closed-loop environment.
This system is commonly used in offices and schools. RFID cards are usually distributed to students and employees for two purposes – to grant them a specific spending budget at vending machines and allow them access to a school or office building.
Each RFID card or object is assigned to a specific person and has its ID number in the telemetry system.
The amount available for use is shown in the system and on the machine at the time of purchase. RFID cards have many benefits for employees, which create a positive work atmosphere and boost morale.
Companies can:
- Boost employee productivity by giving employees a budget to buy a snack, coffee, or even a full meal at the machine, so they don’t need to waste time buying them outside of the office.
- Reward top people for good work and contribution at the workplace or school by giving them RFID gift cards.
You can find various RFID readers on the market.
Some readers can support both RFID and NFC functionality, which is the best option for vendors who want to serve both internal and external audiences. However, if you intend to serve only a closed environment, the RFID reader is ideal since the device is up to 10 times more affordable than card readers.
Cashless Vending Systems Comparison
Knowing how to pick the right cashless payment for your vending machines is half the job.
We have summarized the main benefits and prerequisites for each of the mentioned cashless vending systems in the table below:
Now that you are aware of all cashless methods you can implement at your machines, you can schedule a demo with our product consultants to learn more about Televend’s cashless payment solutions.