E-Payments Growth Will Benefit Vending Industry
Dec 08 2004 : In 2003, e-payments exceeded paper checks for the first time in the US, at 44.5 billion e-payments, versus 36.7 billion check payments, according to a new Federal Reserve study. Credit cards endure as the most popular electronic payment method, with 19 billion transactions in 2003, at a total value of USD 1.7 trillion, while 15.6 billion debit card transactions were made in 2003, to the value of USD 600 billion. By 2007, the Fed predicts credit and debit cards to surpass checks in terms of total annual transactions, which implies opportunities for technology vendors.
With the Nilson Report predicting one-half of the 8 million vending machines in the US to be credit card-enabled by 2009, analysts see cashless micropayments at vending machines and kiosks as an untapped opportunity. The Kiplinger Report is also predicting wireless, cashless payment use at vending machines to double industry sales to USD 70 billion by 2010. Credit card payments at vending machines are similarly projected to total USD 570 million, or two million transactions, by 2007, according to a recent paper from NAMA, the vending industry’s national body.
Pepsi-Cola’s recent awarding to Paymentech of a multi-year processing contract for credit and debit card payments at its vending machines, is a confirmation of the potential in the US market. Paymentech is only now entering the US vending industry, but believes that with more consumers making card-based payments of as little as USD 1.00 at vending machines, the market will grow in the next few years. The deal, which covers several hundred vending machines at locations such as malls, casinos and hotels, is predicted to fuel cashless vending machine payments.
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