Canadian Vending

Features Payment Technology
From the Editor: Fall 2013

Cashless society


September 24, 2013
By Karly O’Brien

Topics

Vending machines haven’t drastically changed. Since their initial
release, the shape, look and services have generally remained the same.

Vending machines haven’t drastically changed. Since their initial release, the shape, look and services have generally remained the same. According to Chuck Pifko, owner of Can-West Vending Distributors, who is featured in a Q-and-A in this edition: “Technology in vending doesn’t happen too often. Every now and again a sleeker and more modern machine arrives, or it is adjusted to accept cash, new coins or polymer bills.”

However, some people in the industry are calling the arrival of cashless payment vending machines a game changer. MEI’s Ed Kozma refers to the technology as a “new creature.”

As a young consumer, I find a lack of cash on hand is one of the biggest reasons I, and other young people, don’t buy from vending machines. I’ve personally experienced this issue while in journalism school working on a project at 3 a.m. I was baggy-eyed and sipping on energy drinks to stay awake, when my tummy grumbled. After a few minutes of searching, I stumbled upon a vending machine, my godsend, only to find that I had no cash on hand. I rummaged through my wallet, convinced that there would be change lurking in the corners, but all I could find were my two debit cards and a credit card.

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This wasn’t the first time either; in fact, this has happened more times than I have ended up actually making a purchase. When I carry cash it’s usually for a specific purpose (such as small purchases), as I trust that most other services offer credit and debit options. Do most other people also carry cash on them only when they have some sort of purpose in mind, and if so, how many times does that include a planned trip to purchase a snack from a vending machine? The probability is low since it’s more of an impulse or last-minute purchase decision.

Then again, at what cost does opening the market to small purchases via debit and credit card come? First off, installing cashless technology will bring in more customers, but it will also mean higher costs for equipment and maintenance, as well as extra fees for Interac Flash.

Second, in many cases, $1 and $2 purchases aren’t allowed because of the high fees associated with the transactions. Convenience stores, for example, tend to have a $3 to $5 minimum on purchases. Such limitations are impractical for vending machine operators, whose products tend to be at the lower end of the price spectrum. This might mean that operators are going to lose money by accepting debit and credit cards and as a result will need to raise prices.

Finally, if you have to raise prices to cover the cost, will customers pay the higher prices? Tough call, especially when the market research shows consumers are driven by convenience and price.

Keep in mind that there is a trend toward this type of payment. According to a recent research report from Technology Strategies International, 20 per cent more Canadians are embracing contactless cards as a payment option as of this year, with the firm projecting that in five years cash will no longer be a dominant form of payment. Based on this, you’re probably going to have to switch over to the newer technology. Question is, do you do it now, and be on the leading edge, or wait? Although it seems a double-edged sword, I think it’s time to accept the rare “new creature” in vending, and allow consumers to see that vending can, in fact, change with the times.

If the road to cashless payment seems uncertain right now, here’s something we all can be sure about: the value and success of CAMA. I would like to congratulate CAMA on a successful six decades of being the voice of vending in Canada, and more recently, the office coffee service community. The association will be having a formal celebration of its 60th birthday at its annual show, which takes place in Vancouver this year and is the western leg of the show’s three-year rotation. Happy Birthday, CAMA, and cheers to many more to come!


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