It might seem futuristic, but—in less than a decade—chequebooks, plastic cards, and even cash may disappear entirely, and we'll wonder why we ever used them in the first place. Cashless payment systems are accelerating like never before, and now they're coming to the humble vending machine near you.
Canada is one country leading the pack with the cashless transactions trend. In 2013, MasterCard conducted a study reporting that non-cash payments account for 90 percent of the total dollar value of consumer payments in Canada.
In February 2017, it finally happened on a grand scale: Pepsi agreed with a payment provider to integrate cashless technology directly into vending machines. Gone are the days of needing to reach into your pocket and find a quarter—now, you can just walk up and pay with your phone.
We've seen this type of tech go from a dead end to almost mass adoption thanks to phone makers Google and Apple, who moved into near-field communication (NFC) with technologies like Google Wallet and Apple Pay. It used to be up to the banks to develop their own mobile wallet before seeking adoption—no easy task. But, due to massive consumer demand for mobile payment, the advent of contactless terminals, and the sheer weight of two technology titans negotiating with those banks, it's finally happening. What else is driving the move to contactless payments?
Advertising and marketing
One tidbit from the Pepsi announcement you might have missed: Cashless payment systems also allow Pepsi to deliver tailored advertising to consumers using the vending machine. Based on their profile (gained from the device with which they pay), Pepsi can target advertisements—like short video ads or nutritional information—to the right user at the right time.
This is already rolling out. One of the biggest deals in Shark Tank history (for a casual CAD$2.6 million) was made in 2016 to a company that makes vending machines with advertisements, as reported by Ad Age. Here's how it works:
"Purchase a Reese's Peanut Butter Cup, for example, and watch a brief ad from Hershey's while you wait for the machine to fetch your product. Each time a sale is made, both brands and Vengo are notified. The machine can also relay where the consumer touched the screen and provide additional insights, as well."
Even though you've already decided to buy a chocolate bar, the maker of the vending machine can advertise how good it is to you or even push something else that's found inside. Even better, they're not left in the dark wondering how their vending machines perform in the real world. Real-time statistics show users are interacting with it.
If you've gone to McDonald's lately, you'll notice a similar trend. The company is rolling out touch-screen cashiers to replace the humans you usually interact with for a similar experience to a vending machine.
When you walk in, your only interaction is approaching a touch screen. It pushes the company's top products to the front and encourages you to go for the more lucrative items. Cashless payment technologies are also encouraged here, with the new machines not even featuring cash input at all. Aside from the obvious cash savings and not needing actual humans to do the job, McDonald's sees the machines as a treasure trove of marketing and data collection opportunities. It tracks every Big Mac, large fry, and drink you order—invaluable info for the future of the company.
According to Huffington Post, McDonald's self-serve machines are currently rolling out in Canada, working through a testing phase around the country. McDonald's Canada CEO John Betts says most of the 1,400 McDonald's restaurants in Canada will be changed to the new system by the end of 2017. Even better: You can use your phone while you're on the way to the store, so you don't need to touch anything there.
Use data to make better decisions
The biggest learning from this advancement? It's something we all already know: Data is key. Digital vending machines, cashless payment technology, and even vending machine advertising is only possible because of the sheer wealth of data captured and evaluated by the companies behind it. You no longer need to make decisions in a vacuum, based on expertise alone. Now, data is the most important factor. If you're not tracking how your users and customers interact with your endpoints, you're losing key data that could help you make technology choices in the future.
Here's an example: If you kept track, at a basic level, of what software your employees use on a daily basis, you might learn that half of employees only use a web browser during their day. Based on that information, you could choose different hardware—less powerful, or optimized for web browser usage—rather than high-end machines for those employees.
Smart data means smarter IT decision-making. Data is power, and knowing how people interact with your tech means you and the business can make decisions that will matter.