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The cashless vending machine payment market is about to get more competitive. Apriva Inc., a specialist in wireless payment technology, this week introduced its Apriva Vend system. With it, Scottsdale, Ariz.-based Apriva is throwing its hat into a ring dominated by USA Technologies Inc., which says it welcomes the new competition. Apriva quietly started moving into the card-payment vending space about a year ago, but this week's announcement of Apriva Vend marks its formal entry. The market opportunity is clear, according to Bill Clark, executive vice president and general manager, North America, of Apriva's Point of Sale division. He says Apriva conservatively estimates there are about 5 million vending machines in the U.S. and Canada, but only about one-fourth, or 1.25 million, are situated where they can reliably send and receive wireless data communications. Less than a tenth of those, about 100,000 machines, are live on wireless systems today. Apriva was processing for about 2,000 of them early this year (Digital Transactions News, Jan. 20). Malvern, Pa.-based USA Technologies early this month said it had 73,000 devices connected to its wireless network, the vast majority being vending machines, up 40% from 52,000 at the end of company's 2009 fiscal year last June 30. More bottlers and vending-machine owners want to equip their machines for card payments because so many consumers now expect to use their cards for small-ticket purchases, even though the required card-reading hardware can cost $300 and up, according to Clark. Operators say average card sales are higher than cash sales. “It's an emerging opportunity,” Clark tells Digital Transactions News. “Not very many [merchant] acquirers have moved into this space.” Apriva will sell its system through acquirers, the first being First Data Corp. Apriva's advantages, according to Clark, include its experience as the leading wireless network provider, with an estimated 65% market share, for point-of-sale systems. Apriva's technology and gateway enable merchants to move around with portable terminals. Clark also says Apriva has connections to 41 different processing platforms. On the hardware side, its main provider is MEI, the leading provider in the vending-machine niche. Apriva Vend also includes a full slate of back-office support and reports, according to Clark. Clark says Apriva's system gives the vending-machine owner more flexibility in choosing a bank, software, and hardware than USA Technologies'. “When you buy something from them, you buy everything from them,” he says, noting that USA Technologies itself is a hardware provider. “You have zero choice.” But Stephen P. Herbert, president and chief operating officer of USA Technologies, disagrees with that assessment, noting that his company works with three processors and multiple hardware vendors. “Some people like to suggest we're a closed system, and we're not,” he says. “We are, however, a one-stop shop where you can get a device, an end-to-end service.” Herbert also says he wants “to take the high road” and not blast Apriva. “We're the company who have been at this for quite a long time,” he says. “We're glad to see a company like Apriva taking this space seriously, and we think it'll be good for adoption in an emerging market.” He notes that the vending machine trade group, the National Automatic Merchandising Association (NAMA), last week named USA Technologies as the winner of its 2010 Innovation Award.
