Vending machine payments company PayRange has raised $12 million in Series A funding led by Matrix Partners to help the company extend deployment of cashless transaction hardware.
Vending machines have historically only accepted cash and coins, but as less people carry cash because of the ubiquity of card payments, the vending industry is turning to technology companies to quickly upgrade for plastic card and mobile payments.
The expectation of paying by cash and coin is particularly painful for the tens of millions of consumers who use vending machines, said Paresh Patel, founder and CEO of PayRange, in a June 26 press release. "These are not casual users. They visit the same machines every day and deserve an easier way to buy their morning coffee, bottled water, sandwich, or afternoon snacks.
PayRange offers vending providers a small device that plugs into the back of a vending machine and uses Bluetooth Low Energy (BLE) to communicate with a customer's mobile device.
Customers choose a payment instrument, including stored card credentials or Apple Pay, and select a nearby machine inside the mobile app. The machine then shows the balance and after the purchase is made, delivers the product. PayRange plans on supporting Android Pay as well.
The vending industry is a $45 billion industry. In the U.S., more than 80 million consumers make purchases every day from the nation's approximately eight million vending machines. And only 5% of vending machines today accept cards.
"Nearly half the time somone walks up to a machine with the intent to purchase, he or she leaves empty handed because the buyer simply doesn't have the right change," said Patel. "This results in billions of dollars in sales lost each year. PayRange solves this problem by offering operators an easy and affordable way to accept any form of payment to capture those lost sales."