Mobile payment revolution begins

This past holiday shopping season set records, driven largely by the rapid growth of smart phones, consumers’ willingness to use smart phones for buying, and retailers’ efforts to accommodate and reward mobile purchases. Mobile commerce sales will increase 91.4 percent this year to reach a total of $6.7 billion, according to eMarketer, a company that studies digital marketing and media.

The mobile payment revolution has been building momentum for years. Consumers have become more adept at using smart phones to find products they want, compare prices, and determine where to find them.

Retailers have expanded beyond their initial online stores and are developing integrated e-commerce programs that include in-store point of sale, Websites, and social media.

Consumer product manufacturers, for their part, have entered the fray, offering smart phone apps that help customers shop, enticing them with chances to earn and redeem loyalty rewards.

Vending operators mostly watched from the sidelines.

Vending machines, the most pervasive retail venue by number of outlets, are “out of the loop” of today’s increasingly integrated retail marketplace. Less than 5 percent of the nation’s snack, beverage and food machines have the telemetry required to participate in the mobile commerce marketplace.

Vending software suppliers note that the rate of adoption has improved in recent years, but investment continues at a slow pace.

Many arguments have been made for vending technology in recent years. The most persuasive of all, perhaps, is the new reality of mobile commerce that is revolutionizing all of U.S. retail.

Product suppliers aren’t waiting.

Product suppliers move forward

Starbucks, since the launch of its mobile payment app in January of 2011, has processed 26 million mobile transactions to date.

Green Mountain Coffee Roasters Inc. in August launched a K-Cup® finder app in response to consumers who had been asking for this type of app to help them with their selection of K-Cup® packs. The app points to the page on the Website where the consumer can purchase the product.

PepsiCo Inc. has partnered with Foursquare, a location-based service, to offer a rewards program that links with loyalty accounts, allowing customers to earn rewards from check-ins at participating retailers.

Coca-Cola Co. sends electronic coupons to customers’ mobile phones, where they can participate in Coke’s “My Coke Rewards” program.

Online initiatives don’t ignore vending completely. Vend customers could, for instance, participate in Coke’s “Twist, TXT, Win” contest by texting in the alphanumeric code under a 20-ounce bottle cap to get an immediate response via SMS telling them whether or not they have won a prize.

More vending machines need to be brought “online” before the machines can accept mobile payments, but in the meantime, vending can benefit from mobile marketing. It’s as simple as attaching a quick response (QR) code to a vending machine or the products in the machine.

QR codes are inexpensive and easy to create. Operators can use the codes to carry manufacturer promotions along with their own company promotions.

Laura Marriott, CEO of NEOMedia Technologies, a QR code provider, said a QR code on a vending machine could direct the consumer to information on the vending company’s promotions, the nutritional information about the products and/or direct consumers to the company’s Website for additional information.

Mobile payment, however, will take vending to a new level.

USA Technologies Inc. (USAT) took a pioneering role by adding near field communications (NFC) technology to its devices and now has more than 50,000 NFC-ready ePort devices in the market. Because many of these devices are installed in vending machines, their vending customers are in a position to accept mobile payments and to benefit from its expected growth. The USAT ePort G8 was designed to be open to all mobile payment platforms, including Google Wallet, ISIS, PayPal and others.