Following two successful pilots that exceeded expectations, American Food and Vending is adding smartphone payment acceptance to vending machines in 35 cities, reflecting consumers’ growing reliance on mobile payments.

American Food and Vending has teamed up with PayRange, a mobile payments solution provider for vending machines, for the 35-city deployment. PayRange’s BluKey devices will be implemented across 50 branches in the United States, enabling consumers to use the company’s eponymous mobile application to complete contactless purchases for snacks and beverages.

“Consumers in general are becoming increasingly cashless – fewer people have change in their pockets to make a purchase,” said Paresh Patel, founder and CEO of PayRange. “Millennials, who are among the most likely to not carry cash, are also becoming the largest generation in the workforce.

“This means they are not able to use the machines at their workplace, so it is important for machine operators to accept cashless payment so they can make the sale and satisfy the consumers. In short, operators wish to accept payment the way consumers wish to pay, and today, that is increasingly becoming with their phone.”

Swiping in impulse buys
PayRange’s platform will enable American Food and Vending to implement contactless payment acceptance across its vending machines without needing to install new network connections or card readers. Instead, the payments provider’s BluKey dongle can be installed within seconds.

Consumers interested in making a quick purchase at a vending machine can download the PayRange mobile app and link their credit or debit cards directly to their accounts. They may also choose to pay with Apple Pay, Android Pay, payroll deductions and coupons.

PayRange and American Food and Vending entered into the initial pilot last year to determine if contactless payments would function well within its vending machines and resonate positively with customers.

Per American Food and Vending, the pilot exceeded expectations, prompting the company to deploy a second pilot in other markets to validate results. The second pilot also experienced success.

Consumers’ ability to make instant snack and beverage purchases with the tap of their smartphones will likely yield higher sales for American Food and Vending. If customers do not have any cash readily available but find themselves in need of a soda, for instance, they may purchase the drink via the PayRange app instead.

Mobile payment capabilities have long been equated with the ability to drive impulse purchases, but their potency could reach its peak when implemented into vending machines, due to the low cost of available products.

Rewarding opportunities
PayRange also offers insights on consumer behavior to its partners, thereby creating more opportunities for those companies to drive incremental sales by developing enticing, relevant incentives and targeted deals.

Consumers have been shown to be easily influenced during the point-of-purchase at vending machines.

Smartphone shoppers that are shown digital ads promoting Apple Pay compatibility at point-of-sale locations are more likely to complete a transaction using their mobile devices and will potentially spend more money, according to a study conducted by USA Technologies (see story).

Additionally, other marketers have already started experimenting with mobile rewards activations for consumers who leverage contactless payment capabilities at vending machines.

Samsung recently placed a spotlight on its mobile payments platform, Samsung Pay, by installing several NFC-equipped vending machines at Lollapalooza and enabling users to interact with the machines for a chance to receive upgrades and perks, such as exclusive products and festival gear (see story).

“Our operators can offer a variety of incentives for consumers,” Mr. Patel said. “One example is buy seven water bottles, and get one free.

“We also allow points to be accumulated and those can be redeemed for select items.”