Why the credit card industry wants to promote cashless vending
Credit card companies have one goal in mind: to increase their own profits. In recent years, they have been trying to get consumers to use plastic instead of cash for small dollar transactions in an attempt to raise their revenue. Therefore, the link between credit cards and small dollar transactions made via vending machines seems obvious.
For around a dollar, consumers can purchase a soda from a soft drink vending machine or a bag of chips from a candy/snack machine. While the single purchase of one candy bar from a candy/snack vending machine may not seem significant, the total of all vending machine purchases (including candy/snack, coffee, ice cream, frozen food, and soft drink vending machines) is something that credit card companies are very aware of. In 2003, there were more U.S. electronic payments than cash and check payments for the first time in history. Microtransactions, such as those made at vending machines, accounted for $1.32 trillion in consumer spending in 2003 which represented more than 400 billion transactions. From 2003 to 2004, micropayment transactions expanded from $2 billion to $5 billion.
Resultantly, credit and debit card associations aim to convert small purchases from cash to cashless transactions via contactless, cashless payment technology. Companies which have already implemented contactless, cashless payment options have found that the new technology has exceeded all company projections. The vending machine industry can play a pivotal role in converting consumers from cash to cashless transactions.
Credit card companies are currently offering vending machine operators incentives such as reduced credit card interchange rates and transaction fees. These incentives are being offered in an attempt to lure vending machine operators to try new cashless payment options. Contactless, cashless payment options would benefit credit card companies and the vending machine operators in the long run by increasing profits for both. This new technology would also be a relief to many consumers who already enjoy the diversity of payment options in other retail locations. A customer who pays for their lattes at a coffee shop using their credit card can now quickly purchase a coffee from a coffee or hot beverage vending machine using their credit card or a form of contactless payment media. Consumers with hectic lifestyles will be more inclined to grab a snack or drink from a candy/snack or cold beverage vending machine if the product is more accessible to them. By diversifying payment options, vending machine operators open up their product to new groups of consumers.
Overview on contactless, cashless payment.
Learn more details about why vending machine operators should adopt contactless, cashless vending.
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