November 21, 2016
By Kevin Woodward
Vending payments specialist USA Technologies Inc. says promoting Apple Pay at the point of sale produced a 36.5% increase in overall sales and a 55.5% increase in revenue from contactless purchases.
Apple Pay promotional messages prompted increased spending at vending machines, says USA Technologies.
Malvern, Pa.-based USA Technologies has been testing targeted digital advertising messages on 35 vending machines in New York and Louisiana since March. These machines use USAT’s ePort payment device, which accepts magnetic-stripe and EMV credit and debit cards in addition to contactless payments, that has a built-in display. The devices are programmed with an image of an iPhone and a “Pay with your favorite card using Apple Pay” line of text.
Other findings from the test, which is ongoing, include a 44.6% increase in total transactions and a 135.2% increase in overall mobile-payment usage.
Consumers, too, spend more using Apple Pay. There was a 6% increase in the total contactless average ticket. The peak was an 18% lift in the average ticket. The average contactless ticket of $1.47 was 26.7% more than the average cash ticket of $1.16.
This demonstrates that consumers, when shown messages at the point of sale, are more apt to use their iPhones for a purchase, and to spend more than if they used another payment option, according to USAT.
Results of the Apple Pay promotion were gauged against a control group of 130 machines that displayed a “Ready-Swipe or Tap Now” message above the Apple Pay and other contactless payment service logos.
The takeaway is that the more consumers use their mobile wallets, the more they spend on each transaction over time, USAT says in a white paper about the test. “But, the more they’re asked to use their mobile wallets, the bigger those increases in spending are,” the paper notes.
Unattended retail might be the gateway to encouraging consumer use of mobile wallets, says Maeve McKenna Dusker, USAT senior vice president of marketing, in the paper. When consumers are in line at a traditional store, they may be hesitant to use a mobile wallet they haven’t used before. “But then they’re at an unattended, self-serve vending machine without anyone waiting behind them, they may be more open to trying out the technology, especially when called upon to do so,” she says.
Another advantage of contactless payments at vending machines, especially in comparison to EMV chip cards, is the speediness of the transaction. While Apple Pay and traditional cashless payments take about the same amount of time to complete a transaction, purchases made with an EMV chip card can take several seconds.
While the card brands have made changes to speed up EMV transactions, they are not widespread. “In just two to three seconds you can hold up your Apple Watch or phone, make your purchases and be on your way,” a USAT spokeswoman says. “We believe EMV has been—and will continue to—drive more consumers to use Apple Pay because it’s such a welcome alternative to the often frustrating EMV experience.”
SPECIAL FEATURERead Digital Transactions Online