On the surface, mobile payments and unattended retail—vending machines and the like—would seem to go hand-in-hand. Why not? No more people turned away because of lack of exact change or a dollar slot that just won’t take the bills you’ve got on hand. That’s not the case, however, as unattended retail isn’t moving into the mobile payments space with any kind of speed.
While there hasn’t been much formal data collected on the topic, anecdotal evidence from those who own vending machines says that mobile payments haven’t been a big part of the equation. It’s not keeping pace with the pace of mobile payments use at retail store locations, and that’s got many wondering just what’s going on.
The problem is largely one of demographics. Most vending machine operators are already aware that the younger users are comfortable with mobile payments options, and use them routinely. Older consumers—and to a lesser extent younger consumers—are still turning to cash and coin much more routinely than the digital equivalents.
Yet with mobile payments proving both increasingly secure and increasingly convenient, some have begun to wonder how much longer the demographics excuse will hold water. With more retail environments turning to mobile payments—particularly restaurants—the notion that people won’t use mobile payments must be falling by the wayside.
It’s a point we’d all do well to remember here. The more options a customer has, the more likely they are to complete a transaction. After all, we’ve all been there; hot day, you’re thirsty, but the stupid Coke machine won’t take your dollar, or demands $1.25 and all you’ve got is a dollar, and so on. Why leave money on the table when mobile payments can fill the bill?
It’s also not hard to see this from the vendor’s perspective. When so many won’t use mobile payments, why go through the time, hassle and expense of installing mobile payments hardware? This is especially true given the nature of Generation Z, set to follow the millennials, which has shown a surprising predilection for paper currency and brick-and-mortar shopping.
Still, for now, mobile payments in vending machines are catching on slowly, and may not take off fully for some time. Given the number of use cases for mobile found elsewhere, though, this is a fairly small loss.
Ellie Dautner, a finance postgraduate from the University of San Diego, is an expert journalist in fintech and mobile payment technology. She specializes in writing about fintech, mobile payments, startup funding, and acquisitions.