Durbin Amendment Doesn’t Impact Vending’ Cashless Future: Operators Must Get Up To Speed On Cashless

July 6, 2011
Vending operators need to learn more about the different ways they can offer cashless to customers. This is the future.
Big news hit the banking and retail industries last week when the Federal Reserve Board decided to limit debit-card swipe or interchange fees at 21 cents per transaction. Vending operators with cashless readers will not immediately be affected by this decision.However, the questions raised by the ruling, known as the Durbin amendment, demonstrate the complexities of cashless transactions that vending operators will have to know about as they expand into cashless.The Fed has limited the fees that banks can charge retailers to 21 cents per transaction, higher than the initial proposed cap of about 12 cents per transaction. Previously, all businesses had been paying an average of 44 cents per transaction.The current rates for debit and credit for vending are already lower than 21 cents, so on the face of it, vending operators are not affected.There is a great deal of concern that banks will begin raising other fees to compensate for the anticipated loss they will receive in debit transactions. This is an issue that could ultimately affect everyone.Vending operators operating cashless machines potentially face bigger fees in other areas. The bigger cost areas for adopting cashless relate to wireless communication expense and hardware needed to equip the machines.The Durbinamendment impacts both pin-based and signature-based debit transactions. It is widely understood that within the U.S., most debit card transactions in vending are signature-based, which include Visa and MasterCard check cards.The federal law as it stand still allows vending and coffee service operators to give customers a discount for payments made by cash. This could potentially be a big benefit to vending and coffee service.Other developments unrelated to interchange fees are important to our industrys future.Many observers believe the future of cashless transactions in vendinglies in contactless transactions.The mobile wallet, whereby consumers use their smart phones to conduct transactions, is expected to dominate small ticketretail commerce. The big question is how fast this will occur.Back in May, the exciting possibilities of mobile commerce became clearer when Google announced the introduction of Google Wallet, a plan that will allow users to store credit cards, coupons, loyalty cards andspecial offers on a smart phone and use the smart phone for making purchases. Google is expected to formally introduce this program in August.Vending operators will face a host of questions on how to make their machines compatible with mobile wallets.In the meantime, vending operators need to learn more about the different ways they can offer cashless to customers. This is the future.