PAYMENT SYSTEMS Will the trend towards contactless payment continue?
As consumer demand for quick and seamless shopping experiences continues to rise, the trend toward contactless payments and new waves of payment innovations will accelerate as well. VI canvassed some experts in the field to gauge what the future holds in contactless systems
Peter Alcock, head of product marketing, NMI: With 74% of customers saying they will continue to use contactless payments in the future, the need for convenient, flexible and touchless payments is no longer optional – they have become a necessity. Additionally, in the UK, the use of cash is quickly being replaced with even small transactions being made by either contactless card or phone. As of February 2022, contactless
transactions have seen a 72.1% increase year over year for debit cards and a 109.4% increase for credit cards. This holds true in the kiosk and vending industry, where self-
service vendors are anticipated to rise 6.4% by 2026. Companies like Foodspot, a micro-store vending concept, allow their customers to use their payment device to unlock and open the merchandiser door, then select their products from the shelves and be charged after closing the door. With the upsurge of self-service vendors, the trend and demand for contactless payments will increase. But what do consumers expect and what will operators need to
do to adapt as we go forwards? Contactless payments are quickly becoming a priority for shoppers as the expectation for businesses to offer them increases. Contactless credit/debit card payments are consumers’ most regularly used payment for in-person purchases in the UK (76%). To adapt to consumer expectations for contactless technology,
operators can purchase hardware and systems like credit card terminals, readers that accept contactless and chip payments and POS terminals for quick checkouts. Consumers expect simplicity and ease of payments, which means there shouldn’t be a disconnect between the screen or display on the vending machine and the display on the payment device. Ideally, once a product selection is made, an instruction to either tap a card or phone or insert cash on the main screen followed by a tap of a card should – once authorised – result in a successful vend delivery. Chip and PIN will decline as a necessity in all but the most expensive vending machines. Digital wallet payments like Apple Pay or Google Wallet will take
hold in vending as consumer demands and trends evolve. Enabling vending machines and kiosks to accept these digital payments will allow shoppers to leverage their phones as payment methods rather than having to carry around a physical credit card, allowing for a frictionless checkout experience. There could also be a use case when a machine is vending access
to a single item for QR code payments. This is where a user would scan the code with their smartphone which would take them to
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a simple web page with a payment form. They would then either enter card details or use Apple Pay or Google Pay to complete the transaction. The benefit for the machine operator is that the contactless reader could be replaced by a simple sticker bearing the QR code. The machine would still need to be connected to the internet to receive the payment confirmation to start the vend. For unattended payments, tech giants like Amazon are continuing
to experiment with their “Just Walk Out” technology, which uses artificial intelligence and ceiling-mounted cameras to track shoppers’ selections as they place items in their cart and automatically charges them when they exit. While it was originally designed for use in retail and grocery stores, it’s now expanding into the entertainment industry, with its newest collaboration with the Houston Astros providing a checkout-free shopping experience for fans purchasing food and beverages. As customer demands continue to drive innovation in vending, payment technology will expand and focus on providing frictionless checkout experiences in these unattended settings.
Caroline Jeanneau, head of vending offer at Worldline The movement towards contactless payments is here to stay for the vending industry. And the pandemic played a very significant part in speeding up this trend. It massively accelerated an already growing behavioral shift, by discouraging contact between vendor and customer to limit virus transmission.
Vending operators must migrate towards cashless payments and go even further as part of an increasingly digitalised society – one that has never, from a merchants’ point of view, been more interconnected with the customer experience. Despite cashless adoption being fragmented across Europe, with Austria and Germany being two countries that harbour greater preferences for cash-based shopping experiences, the swing towards electronic payments has been evident in all western countries. As far as consumer expectation and what operators need to do
going forwards it must be borne in mind that contactless payments and the customer experience go hand in hand, as customers increasingly prefer frictionless transactions. Customers are now also looking for a broader, healthier choice of items to choose from as well as alternative canteens, such as micromarkets and smart fridges. These trends offer new business opportunities for operators, who must also take into consideration how to be more sustainable to attract more customers. Where alternative payment methods are concerned, we are already seeing consumers use their smartphones to pay for goods and services and this is no different for vending. Having smartphone payment
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