There are a few really good test cases for mobile payments — the kinds of transactions that can introduce consumers to the convenience of paying with a mobile device. For the most part, small, frequently executed transactions that require limited assistance fit the bill. And what's a better example of a small, frequent, self-service transaction than a purchase from a vending machine?
According to Mike Lawlor, the SVP of business development for cashless payment services company USA Technologies, automated retailing — meaning vending machines — could be a trigger for the broad acceptance of mobile payments.
"Vending is so ubiquitous," Lawlor said in an interview. "It is an everyday, everywhere part of your life, and because of that, it is catalyst for consumer change in behavior."
USA Technologies specializes in serving automated retailing machines with a potential payment application, Lawlor said. After traditional cashless payments started in brick-and-mortar and seeped into online sales, it has now expanded to unattended retail — a pattern where Lawlor finds similarities with mobile payments.
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"We see it migrating to mobile business, and our technology applies to both the unattended space and the mobile space," he said.
Today, the company introduced an expanded version of its ePort Connect service targeted for small-ticket, self-serve retailing industries. The service's cashless payment, M2M telemetry and consumer engagement features enable self-service terminals to accept traditional mag stripe as well as contactless forms of payment, handles all elements of transaction processing, and allows customers to remotely monitor their unattended retail locations online.
"Our service structure is a one-stop-shop turnkey provider," Lawlor said. "If a kiosk provider wanted to go cashless, he would have to go to multiple vendors, handle customer service; data about the business that would need to be extracted ... so our service package puts all of those capabilities into one service called ePort Connect."
Veronica Rosa, the VP of corporate communications and investor relations for USAT, said the company considers itself a leader in contactless payments.
"We partnered with Masterard and Visa when they rolled out payWave, now we are in a partnership with Isis. That makes us very valuable for mobile wallets," she said.
The Isis partnership was officially announced last week with the "Fifth Vend Free" loyalty promotion, and will pair the company's installed base of more than 100,000 NFC-enabled cashless payment terminals with the mobile wallet technology of Isis. The Isis technology will power the payments as well as let customers redeem offers and rewards.
"Loyalty programs that allow consumers to be rewarded for repeat purchases are essentially uncharted territory for the vending industry," said Jim Stapleton, chief sales officer for Isis, in last week's announcement. "Connecting these businesses with their consumer creates a whole new marketing paradigm for the industry. It's an exciting time for this market sector, and we are looking forward to working with USAT in making this a success for everyone involved."
Other expansions to USAT's suite of services include a loyalty and prepaid program, a mobile marketing app and ePort Mobile, a mobile-based payment acceptance solution for customers "on the go."
According to Rosa, the size of the current cashless market is only 5 percent of what is the potential of machines that can be connected to cashless payments.
"We think the market is just getting started; that's why it's so exciting," Rosa said. "Mobile technology helps the awareness factor because people are getting use to using their credit card in the mobile wallet. So whether it's mobile or straight use of debit or credit cards, it's something all companies are going to have to adapt to and have an offering for."
James Wester contributed to this article.
Read more about contactless/NFC.