PayLab Networks announced it has created a mobile payment app and an embedded POS device for vending machines. The Calgary, Alberta-based company will launch its technology at NAMA 2014, which takes place in Chicago between April 9 and 11.

Once a vending operator has installed PayLab's embedded POS device in its vending machines, a consumer uses their smartphone to interact with the device and download the PayLab mobile app. They can then make a cash-less purchase from the vending machine using their smartphone.

PayLab says its solution leverages internal hardware and location services on the customer's smartphone in combination with data capture and sensors built into its POS device. According to Techvibes, PayLab developed the touchscreen-based POS device in partnership with researchers at SAIT Polytechnic.

"We're looking forward to partnering with vending operators to move the industry forward by offering consumers a unique retail experience," Mike McCrady, PayLab's senior vice president of Business Development, said in a statement. "We think operators recognize the value of an innovative user experience at the machine and its potential to drive revenues while generating greater brand loyalty amongst consumers."

The mobile device is quickly becoming the wallet of choice for consumers, PayLab says. Its solution leverages this growing trend to drive sales at vending machines while providing a platform to actively engage consumers at the point of sale.

"Recent industry research suggests more than half of regular vending users would increase their purchase behavior if the industry were to embrace further technical innovations, while more than two thirds of consumers believe their smartphone will eventually replace payment cards," PayLab says. According to its website, PayLabs solution offers vending machine operators low merchant fees.

"During the initial development stage, we examined how other mobile payment solutions, including Starbucks' highly successful mobile wallet, were able to engage their audience," said McCrady. "We are now bringing those same ideas and innovations to vending." He added that offering mobile payments at vending machines will capture the consumer's imagination in ways that adding traditional mag-stripe card readers to the machines cannot.