Cashless vending machines generating more revenue. (Source: Shutterstock)
Consumers are eager to use vending machines that embrace cashless technology, according to a new study by Michigan State University and digital payments provider USA Technologies. It was the largest study of its kind on consumer behavior around cashless technologies on vending machines, the school said.
The study of 250,000 vending machines found that adding cashless technology boosted revenue from those machines by 35% on average over the 18 months after adding the technology.
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However, low-performing machines making less than $2,000 in sales per year saw even bigger improvements. According to the study, adding cashless technology to those machines boosted their top-line sales by 110% on average.
Although adding cashless technology to vending machines increased cashless sales by 131% on low-performing machines after 18 months, cash sales also went up by 97% on average for those machines, the study noted.
"We believe that the results of this study underscore the real financial and operational value of adding cashless technology to every machine," USA Technologies Senior Data Analyst Jim Turner said.
"Not only could cashless technology facilitate more sales because it enables people to pay with whatever method is most convenient for them, but it could significantly increase cash sales as well, which is partially driven by the ability to offer premium products and an increased awareness of machine performance due to online management tools," Turner added. "We believe that having the data to make better decisions, even on a low-performing machine, can potentially result in significant additional revenue for operators."
The study also found that adding cashless technology to vending machines increased total transactions by an average of 26% over the subsequent 18 months, increased credit card transactions by 74% on average and increased spend per transaction by 7%. Most of the revenue growth (70%) was due to the increase in the number of transactions, it said.
Michigan State's study follows other recent studies finding that mobile wallet use, electronic payments and debit card use are all increasing.
Earlier this year, data from the Electronic Transactions Association and payments consulting firm The Strawhecker Group, for example, found that overall growth in consumer spending via electronic payments such as credit cards, debit cards and mobile wallets increased by 7.2% for the third quarter of 2018 compared to the third quarter of 2017, when the year-over-year growth was just 3.5%.
Also earlier this year, a survey of 240 U.S. credit unions by CO-OP Financial Services, Mastercard and Mercator Advisory Group found that the debit card is still one of the most frequently used forms of payment. Credit unions are optimistic about the future of their debit card portfolios due in part to growth in instant-issue technology, debit rewards programs, as well as changes in how merchants route transactions, it said.
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