Can Apple Pay give vending machines a glimpse at their customers?
Vending machines are perhaps the least personal way to sell items, but mobile wallets are providing a fresh visibility into their customers' habits.
It's even possible to use mobile wallets such as Apple Pay to enroll vending machine customers into a loyalty program — a concept that seems at odds with the impulsive and anonymous nature of most vending machine purchases.
"When a consumer uses coins or cash, all you can tell is volume over a long period of time," said Amelia Powell, USA Technologies' senior marketing director. "But with mobile, we can pin down when transactions are happening and can report on that information."
In a deal announced Thursday morning, USA Technologies (USAT) will integrate its MORE. loyalty and payroll deduct platform with Apple Pay for use at as many as 300,000 machines across the U.S. Companies that operate unattended machines, such as vending machines that dispense soda and snacks, will be able to more closely tie contactless mobile payments to marketing. Consumers can enroll and have the USAT loyalty card added directly to Apple Pay.
USAT is also collaborating with Urban Airship, a mobile market development company, to improve marketing content for mobile apps. Consumers that present an iPhone or Apple Watch will get an electronic prompt to join USATs loyalty program. These consumers can then add a digital loyalty card to the Apple Wallet, which can be used to receive or redeem loyalty perks at any participating machine, since that user's loyalty information will be "shared" with the transaction.
"This frees up operators to be creative when reaching out to consumers that are typically hard to communicate with at unattended locations," Powell said.
Apple Pay is the first third-party mobile payment app to partner directly with USAT's loyalty program, though Powell did not rule out working with other wallets. Its fees depend on USAT's partnerships with the different companies that deploy its vending machines.
USAT has long been aggressive in pursuing contactless mobile payments. It was an early marketing partner with Coca Cola and the telco-led mobile payment app Softcard (then called Isis), and has more recently marketed the availability of Apple Pay at machines, a move that has produced positive results for the mobile payment app.
USAT hopes the new integration will make mobile payments easier to use at vending machines, which would result in even greater volume for Apple Pay. Despite the recent signs of pickup, Apple Pay's use has mostly lagged expectations since its launch in 2014. And across all providers, contactless mobile payments at the point of sale is still only about one percent of all transactions.
"By reaching out beyond the point of sale, we can anticipate the needs of consumer better and drive traffic better," Powell said. "And we can present offers that have more value to consumers."
Since self-service has always been how people use vending machines, and consumer boost in comfort with Apple Pay at vending machines can spread to other retail categories, Powell said.
"Unattended is where traditional retailers are going," Powell said, noting Amazon's new concept store that eliminates the checkout counter. "Vending machines are a proving ground. If it's not super complicated to make an NFC payment at a vending machine, people will use it elsewhere."
Unattended venues can help jump-start mobile wallet adoption, said Zil Bareisis, a senior analyst at Celent.
"First, it is less likely that a vending machine will have a long queue, so the customer is more willing to try new technology, especially if they are reminded by a sign or advertising," Bareisis said. "Even if it doesn't work, there is no 'social embarrassment,' and they are not holding anyone up by taking longer. Second, these tend to be frequently regular transactions, which can help form a habit."