Most Vending Operators To Accept Cashless Payments This Year, Survey Data Suggest

Approximately 57% of vending-machine operators plan to add or expand their use of cashless payments this year, while only 8% likely will not add payment card acceptance to their machines, new survey data suggest.

Apriva, a wireless-payments technology company, and the National Automatic Merchandising Association announced the results of their joint survey of 200 association members Feb. 23. They conducted the phone survey in December, Apriva says.

Neither Apriva nor the Chicago-based association released detailed survey data.

Scottsdale, Ariz.-based Apriva began offering cashless-payment services to the vending industry in April 2010 (see story).  At that time, Apriva estimated cashless payments could be added to an estimated pool of 1.5 million vending machines.

“In 2010, we more than doubled our placement,” Robin Houston, Apriva director of marketing, tells PaymentsSource, without noting a specific total.

Among Apriva’s competitors is Malvern, Pa.-based USA Technologies Inc., which in January said the number of cashless transactions it processed in the fiscal 2011 second quarter ended Dec. 31 increased 14.4%, to 15.9 million from the 13.9 million the previous quarter. The company did not note the total for second quarter of fiscal 2010.

USA Technologies’ second-quarter 2011 processing volume was $26.2 million, up 7% increase from $24.5 million the previous quarter.

Because most vending-machine operators have little experience accepting credit and debit cards, they tend to resist supporting cashless payment, Apriva’s Houston says. But the operators are learning that adding card acceptance may help them to increase their prices in an industry where competitors are keenly aware of each other’s prices, she notes.

“It’s definitely a price-sensitive market,” Houston says.

Apriva’s cashless-vending technology requires a card reader and a remote data port, which can cost between $400 and $600 per machine, for sending transaction information wirelessly to Apriva, Houston says. Merchants also pay a $9.95 monthly gateway fee plus the discount rate for each card transaction, which includes interchange and other processor fees.

One of three processors Apriva works with–First Data Corp., Bank of America Merchant Services or Heartland Payment Systems Inc.–bill the merchant directly for all of the fees, Houston says.

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