If you’re an on-the-go person and don’t like waiting in lines for snacks or drinks, or if you’re at work and need a mid-afternoon caffeine kick, chances are you visited a vending machine a time or two. They’re quick and convenient with no human interaction.
Besides the once in a while frustration of trying to shake your bag of pretzels loose from the last rung of the vendor when it gets stuck, the machine is probably pretty stress-free. But what about those times when the machine doesn’t give your change back, or worse yet, doesn’t take your crumpled bills?
Newer vending machines are being equipped with chip card reading technology, and its important to understand the changing technology.
Not quite yet, at least. Banks are still in the process of completing the switch from magnetic stripe to chip reader cards so vending machines are still equipped with a stripe to swipe your card, a slot for cash and coins and some have been updated to accept chip readers.
Dipping your card in vending machines works the same as it would at a checkout counter in a shop. The screen will prompt you to insert your card, it will communicate with your bank, authenticate your purchase and ask you to remove your card.
One thing to note is that there is no one working a vending machine to remind you that you have to dip. All cards that have chips right now also have the magnetic stripe, but that doesn’t mean you have the option. The magnetic stripe reader in the vending machine is for those who still haven’t been issued a card with a chip in it. So, if you try to swipe your card and it doesn’t let you move forward with the transaction, it’s probably because it knows your card has a chip and it’s waiting for you to dip it.
The people who create payment terminals are not going to make vending machine payments any less secure than they would be at a payment terminal manned by an employee. Dipping your card in a vending machine is just as safe as dipping it in the attachment a cashier has on his or her tablet.
Inside the hardware where you insert your card, the process of encrypting your purchase begins. As with anything else, whichever snack or drink you bought has a data code that is unique to your card and your purchase. It will change every time you make a purchase in that vending machine — that’s what makes chip-reading technology so fraud-resistant.
Your transaction code gets sent to your bank, where it will transfer to the receiving bank, and your purchase will be complete. Vending machines typically won’t ask you for a PIN number or signature.
Keep in mind, chip transactions tend to take just a few seconds longer than the magnetic stripe transactions. This is because the payment information is transferring in real-time and the data must be encrypted. A few more seconds spent at the vending machine is worth it when it means your payment is secure and you don’t have to worry about fraud over something as simple as a two-dollar beverage or 75 cent bag of M&M’s.
Because many companies are switching to payment methods such as Apple Pay, Google Pay or the like, vending machine card reader technology has to keep up as well.
Think of the last time you went to the mall and craved an ice-cold Coke. Although it used to be as easy as pulling a buck out of your pocket and waiting for the bottle to fall, now there are three ways to pay for such a drink: digital wallet, cash or credit card.
Nowadays, you never know who’s carrying what. Some people prefer cash. Some prefer to make larger payments on credit and smaller payments with cash. And some want nothing to do with either and have downloaded their credit card onto a digital wallet.
If you’re the type who prefers digital wallet, it might be hard to find a vending machine just yet that has frictionless payment options only. Instead, what some vending machine owners are doing is switching out the payment terminal and keeping the machine. This quick update means that cash and magnetic stripe technology is still accepted by the vending machine card reader, but people with chip readers can now use them too.
Now just because chip credit cards are also enabled with Near Field Communication (NFC) doesn’t mean this payment method works at all vending machines. Some vending machine card readers don’t have the technology necessary to complete a contactless payment. You’ll have to look for the symbol on the terminal. If you see a circle with radiofrequency lines and a hand with a card, this means the payment terminal will take a digital wallet payment.
Introducing cashless options might not be a bad thing when it comes to updating your vending machines. But is it worth the cost?
While many people still shy from using credit cards for small purchases, it’s still nice to offer the option if they forget to take cash out or forgot their wallet before they made the trek to the vending machine. In recent years, because credit card spending has become more mainstream due to the ease of use, it might even boost sales for your vending machine if you add the option. Customers are increasingly choosing options that take less time. They are also feeling much more comfortable making credit card transactions because EMV is taking such strides to keep personal information safe and encrypted.
If you have many different generations visiting your vending machine, chances are high they want to pay in many different ways. If your vending machines are located in offices where most people are used to them for example, and know they take cash only, it might not be worth the expense of refitting your machine with vending machine card readers. Alternatively, if your vending machine is located in an area full of young professionals that rarely carry cash, a retrofit may have excellent ROI.
Updating your vending machine with new payment terminals means keeping with simple designs. You don’t want your customers to be intimidated by a vending machine card reader. It should be as straightforward as it can be. After all, vending machines are all about convenience.
When something looks easy to use, customers will also be more trusting of how secure the kiosk or vending machine is because it won’t be difficult for them to figure out such as where the card actually goes and whether or not they should leave it in or pull it out before the transaction is complete.
At ID TECH, we offer various options to keep your vending machines running efficiently and accepting payments securely.
Whether you choose to use a digital payment option or a chip card reader without NFC capabilities, we can help you choose the one that will keep your customers satisfied and your business running.
We have over 30 years of experience with payment terminals and we know how much a contactless or card reader machine can boost business nowadays. Reach out if you have more questions or want to look through some of our products. Read our other blogs about payment terminals to find out just how much is changing in the world of digital transactions.