Aqua Fill, a nationwide provider of bulk water and ice vending machines to retail locations, has found cashless readers a beneficial customer enhancement. Aqua Fill, a division of Schur Marketing & Technologies USA Inc., sells its products through hundreds of combined cash and cashless vending machines located in chain supermarkets, big box stores and gas stations nationwide.
Customers can purchase products by cash, credit and debit cards, as well as Aqua Fill’s proprietary magstripe “value cards” at its machines. Price points for water typically range in approximately 25 cents per gallon. Many customers purchase five gallons at a time for $1.25.
“One of our primary objectives is to standardize the purchasing process and user experience throughout our network of machines,” said Ken Strong, vice president of corporate development for Aqua Fill. “This requires us to implement the cashless technology in our vending devices. But we find that it is an investment that really pays for itself in terms of revenue growth, lower operating costs and enhanced customer service.”
Aqua Fill has utilized the cashless vending as a differentiator and established direct marketing programs, Strong said.
Cashless began eight years ago
Aqua Fill first experimented with card readers in its vending machines eight years ago. They recognized that more consumers were using cashless as more merchants were offering it. They also learned that transaction fees from the credit card processing companies were being reduced for smaller ticket purchases.
Aqua Fill has utilized both the prepaid cashless and “open” cashless offerings of its cashless payment solutions provider, Apriva, through its Apriva Vend service. This dual use of Apriva Vend’s capabilities came in phases.
Aqua Fill’s first cashless offering was proprietary, prepaid cards and did not include the capability to use credit or bank debit cards. Prior to its relationship with Apriva, the company hired a cashless provider to install and configure wireless payment bezels into a handful of machines.
“Our initial experience with cashless was maybe a bit underwhelming,” Strong said. “Perhaps less than 1 percent of all sales were conducted with cards. But we had an inclination that cashless had the potential to really grow, so we kept with it.”
In 2008, Aqua Fill switched to Apriva Vend, which provides a turnkey cashless solution that integrates MEI’s state-of-the-art hardware with software, wireless connectivity, financial services, and ongoing service and support.
Though the initial uptake in cashless sales was relatively small, the growth that Aqua Fill projected began to materialize in 2008, when the Apriva Vend solution was fully implemented.
Cashless sales expand
“We started with sales at less than 1 percent, but over time, the cashless revenue steadily grew, to over 10 times for credit and debit card sales, compared to our initial experience, and we also saw very strong growth for our Aqua Fill branded card,” noted Strong.
Strong further noted that while cashless sales have quickly escalated, the level of cash-based sales has remained level, allaying any concerns that cashless sales were cannibalizing traditional coin- and dollar-based sales.
“Our figures indicate that the cashless sales are mostly added revenue,” said Strong. “From what we’ve heard from customers, they like the convenience of paying by card. And frankly, we’ve found that accepting card payments reduces our operating expenses and increases the bottom line.”
“Processing cash payments in and of itself becomes very cumbersome and costly,” said Strong. “It takes time to collect, sort, and bag coins and dollar bills. Then, we hire armored cars to transport the cash to the bank, which in turn, charge us fees to accept the cash, because it takes them an inordinate amount of time to count and process the cash we bring to them.”
“And then,” Strong continued, “there is always the shrinkage issues associated with cash payments that are all but negated in a cashless environment. Quite frankly, our experiences demonstrate that cashless payment solutions not only pay for themselves in terms of generating new revenue, they help drive down expenses across our business. In a competitive environment like ours, it’s a solution that makes complete and perfect sense.”
A customer can purchase or re-value the prepaid value card online or calling a toll-free phone number. These cards can be purchased at selected grocers. Cards can be bought in values such as up to $100, and there are some promotions whereby customers receive loyalty rewards.
Aqua Fill manages the proprietary card sales internally.
Prepaid cards help meet state laws
One unique benefit to Aqua Fill for the prepaid card is it allows customers to meet state laws that require them to provide water to employees. Businesses such as landscapers and construction companies prefer providing the cards to their employees instead of cash since the prepaid cards can only be redeemed for water purchases.
The credit and bank debit card purchases are managed by Apriva, which acts as the cashless gateway.
Bill Clark, executive vice president and general manager of Apriva Point of Sale division, said Aqua Fill is one of a handful of vending operators that makes use of both the “open” and prepaid cashless options. He also noted that most of Apriva’s vending operator customers are more interested in the “open” cashless, at least in the initial stage.
Clark noted most of the “open” cashless purchases are on bank debit cards, not credit cards.
Aqua Fill, a bulk water and ice vending service provider, has found a high level of consumer acceptance for the convenience of offering both “open” and prepaid cashless.