Bringing Cashless Vending Into Focus, by Alicia Lavay-Kertes

Issue Date: Vol. 50, No. 6, June 2010, Posted On: 6/21/2010

Bringing Cashless Vending Into Focus

Alicia Lavay-Kertes
Alicia@vendingtimes.net
National Automatic Merchandising Association, NAMA, Bank of America, cashless vending, vending, vending business, vending machine, coin machine operator, vendor, vending news, bulk vending, coin-op, coin-op games, coin-op news, Vending Times, Alicia Lavay

The industry is talking about the National Automatic Merchandising Association's new Cashless Solutions program. For readers who are not familiar with NAMA's newly formed relationship with Bank of America Merchant Services, you can read more about it elsewhere in this issue.

If you are aware of it but are still confused, I have a sneaking suspicion that you're not alone. Don't get me wrong. I truly believe that this is a real game-changer, just what we need to revitalize the industry. We have recognized for years that offering patrons the ability to pay with their debit or credit cards can overcome much of their resistance to $1-plus vend prices. And we have known that alert use of today's technology can allow us to devote more attention to spending patterns and better meet patrons' desires, while learning more about those patrons. So why isn't everyone doing it? Because it costs money. Perhaps worse, it involves a great many parts, and it's not easy to see how they fit together.

The good news is that NAMA has been able to negotiate attractive processing rates with BAMS for the new Cashless Solutions program. Those who have been on the fence, wondering whether (or when) to adapt or purchase new vending equipment, now see several paths that they can follow. Access to the details gives shape to the imagination; people can envision the steps involved in getting from here to there.

For this reason, suppliers should be aware that a great many operators now will be drafting plans, even if only in broad outline, and those plans will include hardware and software preferences. Now is the time to make themselves and their products visible and desirable.

To understand the opportunity, we need to understand the choices. The NAMA program is a good place to start, because it is detailed and transparent. It is an excellent source of questions to ask prospective service providers.

When I took a step back, I recognized that my confusion largely was caused by the number of participants involved in a cashless transaction. NAMA does a good job of explaining this. In broad outline, there are four, including the cardholder. Completing the transaction involves looking to see whether the card is valid, then sending the charge to an acquiring (or merchant bank) for settlement and to an issuing bank, which issued the card and bills the cardholder. This basic structure predates wireless networks and even the networked merchant terminals used in retail stores. Underlying it was (and is) a supervisory body - a "card association" or something that does the same things - to establish and enforce rules, and to route transaction data to the cardholder's bank.

Automated transaction processing at high speed has slashed the cost of doing all this. It has made accepting cards attractive to retailers selling lower-price merchandise. For that to happen, though, more components had to evolve. These include a secure wide-area communications medium or channel (in vending, almost always a wireless network), a "payment gateway" to receive the transaction request, retrieve the data and generate reports, and a "payment processor" to receive data from the "gateway" and route it through the card association to the acquiring bank.

This complexity makes it hard to tell who is doing what, and to whom; but it does encourage competition and so widen choice, spur progress and keep costs down. Variety offers operators the ability to choose, or assemble, a program that meets their needs most closely.

This point isn't often made, but I think it should be. If one giant organization controlled every part the system, including the communications medium, and allowed no competition, it would have little reason to improve and it could charge what the traffic would bear. As it is, we have a fruitful mix of competition and cooperation that has expanded the playing field.

Another point worth making is that every advance in vending payment has imposed a cost, but also has increased sales volume and made it possible to sell a wider variety of merchandise. The ability to offer major credit and bank debit card acceptance can strengthen the appeal of "closed" (hosted internal) cashless systems in the many locations that can benefit from them. This is good for operators, suppliers and locations alike. It broadens the range of available options that operators can adapt to their locations' needs.

And, unlike coin changers and bill validators, cashless terminals give vending access to a new world of retail promotional opportunities. They represent another step (and it is a big one) in vending's long journey toward the retailing mainstream.

Operators now can, and should, study their particular situations carefully, evaluate their options, and adopt the new technology they need when they need it.

The worst thing to do would be to ignore opportunity when it knocks. We cannot let the world pass us by.

Terri Starnes-Bryant, My Fearless Story...........

I am native of High Point, NC and a lifelong resident. I attended Ledford Senior High School and upon graduation, attended Western Carolina University where my selected major was Graphic Design. After three semesters at WCU, I transferred to Guilford Technical Community College and took courses in Accounting, Art and Photography. Due to life struggles, I was never able to attain a college degree, but that didn’t stop my drive for success.

Coming from a family of entrepreneurs, I was determined to make it in the business world one way or another. I attempted many business ventures, only to be stopped by financial limitations or family issues, but knew entrepreneurship had to be in my future someday.

I married my first husband, secretly, at 17 years old in South Carolina while at WCU. We were married for three years before we told our family and that was after we had a full blown wedding with gown, pictures, cake and all the works. Not until I was pregnant with my first daughter did I finally tell my mother how long we had actually been married. Quite a shock is an understatement.

Within nine months of giving birth to our daughter, I was pregnant with our son. Someone told me it was harder to conceive the second time around – WRONG, but anyway, we were on the roller coaster of life. My first husband was overwhelmed and turned to drugs and alcohol – I was blind to it for awhile but really had no idea until he lost his job. That was the turning point in our marriage and I left. Within one month, he took his life. He was only 29 years old and the kids were five and three.

I tried hanging wallpaper for a living, which was great for a while, and then I tried a pet sitting service, which bombed. My closest success was a courier service where I did really well until my best customer told me I had to be available 24/7. With two small kids, there was just no way to make it work. I even flipped a few houses on my own, where I was nicknamed “Terri Tool Time” – I thoroughly love working with tools. I had various jobs from bank teller to graphic designer, to finally coming to work for my future husband. I actually had to beg for the job. It’s one of those stories that you tell your kids when they start looking for a job – keep going back until they throw you out the door – well he didn’t throw me out and gave me a chance to prove myself. I offered to work for two weeks without pay just to show I could do the job. I started in the warehouse where I learned to drive a tow motor. I cleaned, filed, stacked, stocked, answered the phone, you name it, I did it. We obviously started dating and through some trials and tribulations, we finally got married.

He had two young daughters and I had a daughter and son. We weren’t exactly the “Brady Bunch”, but we tried. I previously had a tubal ligation after my son was born, but we decided to try to have a child together, so I had a reverse tubal and it worked – another daughter. Our attempt at raising the most dysfunctional family I had ever encountered turned totally upside down. Once the older kids were in their teens, we went through everything from teenage pregnancy to drug abuse to alcohol abuse to shooting BB guns at passing cars. It was horrible and I was the weak, too lenient parent who had a real hard time with discipline, so my kids paid the price and I had a stress Heart Attack at age 45. They were in and out of drug rehab and/or jail multiple times, still addicts, but now clean, prayerfully for good! We now have three beautiful grandchildren and starting to make life seem promising and exciting again.

My husband sold his company due to the economic downturns and we have made major life adjustments. Our home of 16 years burned to the ground due to a chimney fire. Our whole world was falling around us. While this was happening, I was able to attain U.S. distributorship of Microtronic, a technology product out of Switzerland and finally had my own company! I tried it on my own, but eventually partnered with a great businessman and it is quickly becoming successful! The future holds many great mysteries and adventures and I can hardly wait! My being featured in the book, "Fearless Women, Fearless Wisdom" is truly a whole new chapter in my life!

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