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IN M Y O P INI O N
New payment technologies go well beyond cashless
By Mike Lawlor, Contributing Editor T
he continued demand by con- sumers for cashless payment systems, emerging consumer
trends like mobile, prepaid and loyalty programs, and two-tier pric- ing programs that enable operators to charge different prices for cash and credit, have changed the busi- ness model for cashless payments systems and associated services in a rapid and profound way. The prepaid card market is
expected to hit $443 billion by 2017, according to Boston Consult- ing Group. In addition, 60 to 70 percent of smart phones and tablets will be near fi eld communication (NFC) enabled by 2014, according to Goldman Sachs Research. These trends refl ect how consumers are looking to be rewarded for their
dependent on cashless payments for more of their everyday purchases.
Two-tier pricing takes off Operators that haven't yet made the transition to cashless now have even greater incentive. Two-tier pricing can provide a more cost-effi - cient path for operators to combine consumer's increasing dependence on cashless systems with the operator and consumer benefi ts of emerging retail trends. By helping to offset processing costs, two-tier pricing can re-shape the delivery model, returning more profi t to an operator's bottom line than ever. USA Technologies Inc. knew
two-tier pricing would be popular with operators looking to cover processing costs for cashless
VENDORS must be positioned
to offer the consumer a complete interactive experience.
loyalty to a brand or a retailer with coupons and promotions. Prepaid cards give operators the ability to track consumer purchases and/or offer special deals to incen- tivize consumers. They also ensure a captive audi- ence and a more direct one-to-one relationship with the consumer. As the availability of NFC-capable phones increases over the next few years, consumers will become more
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transactions, but we wanted to be sure consumers weren't put off by credit and debit card prices that were higher than the discounted cash price. So far, early indicators show that when comparing gross cashless sales on two-tiered deploy- ments before and after deploy- ment, gross cashless sales is up by approximately 20 percent and cashless usage is up by two percent- age points. Consumers simply aren't
Automatic Merchandiser VendingMarketWatch.com April 2012
Mike Lawlor is the senior vice president of sales and business development at USA Technologies Inc., based in Malvern, Pa.
balking at credit/debit prices — they are spending more.
Complete consumer experience This coming spring, we plan to introduce an interactive prepay, coupon and loyalty program to further enhance end-to-end cashless payment solutions and services. These new value-added services will enable operators to offer branded prepaid cards that give consumers the ability to reload a card, stack up loyalty points and be rewarded for their purchases with coupons and promotions. The program can be integrated into social media sites to strengthen that retailer-con- sumer relationship and broaden visibility for the operator and the brand. Eventually, GPS location services will be available that notify the consumer via email, a mobile application or over a Web interface, of any special deals the operator may be offering based on consumer location. These new services, combined
with the readers already in the fi eld that are able to accept digital wallet technology like Google Wallet, Isis, and PayPal, further prepare opera- tors to benefi t from payment trends as they emerge. Networking your machines is no longer simply about payments and reporting. Vendors must be positioned to offer the consumer a complete interactive experience that stays with them long after they've walked away from the machine.
