Vending machines may become a little more convenient.
PayRange, which enables vending machines to accept a variety of payment methods, from Apple Pay to credit cards, announced yesterday (June 25) that it received $12 million in Series A funding, led by Matrix Partners. The startup seeks to modernize the $45 billion vending industry, which it said remains “stuck in the era of cash and coins."
“The expectation of paying by cash and coin is particularly painful for the tens of millions of consumers who use vending machines as their work or school fridge,” PayRange founder and CEO Paresh Patel said in a company release. “These are not casual users. They visit the same machines every day and deserve an easier way to buy their morning coffee, bottled water, sandwich or afternoon snacks.”
“Nearly half the time someone walks up to a machine with the intent to purchase, he or she leaves empty-handed because the buyer simply doesn’t have the right change,” Patel continued. “This results in billions of dollars in sales lost each year. PayRange solves this problem by offering operators an easy and affordable way to accept any form of payment to capture those lost sales.”
PayRange allows any vending machine to accept all forms of payment through a small device that plugs into the back of the machine, accompanied by a customer-side mobile app. Upon launching the app, customers are able to select their payment method and choose a machine located nearby. Payment information is managed by a secure PCI compliant processor, and no personal information is shared with the vending machine, the company explained.
PayRange currently supports Apple Pay and plans to support Android Pay as well.
"To date, neither Apple Pay nor Android Pay could work directly on a machine without a network connection, of which only 5 percent of vending machines currently have. Far fewer have the required NFC reader. Using the PayRange app, however, users can fund their accounts through these digital payment methods and instantly send payment to their designated machines,” the company added.
According to PayRange, nearly 80 million U.S. consumers make purchases from vending machines each day, and due to a lack of payment innovation, 98 percent of these transactions are done in cash. Enabling digital payments not only reduces the potential of lost sales but also allows operators to see real-time inventory and user purchasing data on a smart vending platform.
“PayRange applies sophisticated technology in an elegant, affordable way to remove all payment friction from the vending experience. In doing so, it generates happier customers and more revenue for operators,” said Jared Fliesler, a general partner at Matrix Partners and a member of PayRange’s board of directors. “It also provides the potential to sell a wider range of products at varying price points and the tools to operate these machines as mini retail centers. We’ve just started, and already operators are seeing a double-digit lift in sales when they add PayRange.”
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