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The unstoppable shift towards cashless payments in the vending industry is unlikely to abate any time soon. For vending operators, this further underlines the importance of adopting the latest payments infrastructure as a means to providing customers with their desired payment method. By offering their customers a comprehensive set of payment options, merchants are doing all in their power to make the payments journey a seamless one for these clients as well as crucially increase the likelihood they will return at a later date.
One of the most recent trends has seen customers switch to using their smartphones to pay for their goods and services via digital wallets. These convenient payment methods require less effort on the part of the consumer, who can simply open their smartphone and flawlessly pay for their item on the payment terminal, instead of having to take out a physical card or wallet. Certainly, this is a new dawn for vending and payments as a whole. Up until recently, vending machines only accepted coins as a payment means, but the pandemic and trends existing before it came about have developed in leaps and bounds to the benefit of both the consumer and the merchant.
It’s not just what’s on the outside of these vending machines that is changing – the way consumers pay for their item– but what is inside too. The pandemic has triggered a rush towards healthier snacks and meals as the importance of health was catapulted into the forefront of public conscience. In response, instead of selling chocolate bars and fizzy drinks, vending merchants have updated and diversified their offering: many machines now exclusively offer fresher goods, often through smart fridges. These devices initially established themselves across the US and now are becoming more commonplace in European markets as well.
Interestingly, and perhaps unsurprisingly, we are also seeing sustainability and eco-friendliness as an integral element of the payments and user journey in the vending world. Indeed, it’s very possible we will see reverse vending business markets in the near future. These encourage customers to return goods to vending machines to be recycled – if they do so they could be rewarded with an incentive, such as a part refund on their product.
Certainly, the question of how to recycle goods, including those purchased from vending machines, is being talked about at a national level, with the Nordic countries moving ahead of their counterparts in propelling this reality into the public domain. But merchants need to allow for a strong degree of flexibility and agility when approaching their payment capabilities, as new ways of paying for goods are coming, with a greater emphasis on digitalisation and in turn security. Often the more digitalised a product becomes the more security it needs.
The Second Payments Services Directives (PSD2) – a mandatory EU legislation designed to make payments more secure – is quickly becoming more influential for merchants as they look to protect themselves from any security issues to comply with this regulation. And for the vending industry it’s no different. One key way PSD2 will impact the industry is through its mandate of a greater emphasis on customer authentication, via the Strong Customer Authentication (SCA) requirement.
Thus, vending customers may find themselves having to approve a machine transaction through, for example, fingerprints or facial recognition. Making the customer enter a PIN number, a requirement associated with the pre contactless era, is being brought back into the fold of the payments journey – it is being regularly used across Italy – and is another way merchants may bolster their payment security credentials.
About the author
Caroline is Head of Vending Solutions for GSV at Worldline. She has over 20 years’ experience in product, strategic and field/communication marketing in the MedTech, FinTech and payment industries. Prior to Worldline’s acquisition, she spent over 11 years working in payments at Ingenico. Caroline originally started as a Global Operational Marketing manager role leading the global operational marketing and communication activities for payment terminals & services supporting all geographies across the world. Caroline is adept at leading and managing the global offers for the Vending market and is responsible for identifying needs, developing appropriate solutions, and defining the value strategies for Vending players.
