Vending machines, increasingly, are ditching the dollar bills in favor of payments rendered in bits and bytes. Kiosks are increasingly becoming part of the retail landscape.
As reported in the latest Unattended Retail Tracker, done in partnership between PYMNTS and WorldNet Payments, unattended retail is gaining traction worldwide, on the heels of growth in consumer demand and as employers look to increase their operating profits.
To that end, Will Byrne, CEO of WorldNet Payments, took note of the 7 percent rise in value per transaction for the vending machines that have gone cashless. The intelligent vending machine market, measured globally, could be worth as much as $15 billion by 2025.
A number of factors were, have been and will continue to be at play in achieving and sustaining that growth, he told PYMNTS. “A lot of that increase is due to improved customer convenience,” Byrne noted. “Sometimes customers don’t have cash, or don't have the right amount, and cards are fast and convenient.”
The convenience factor, he said, looms large in data tied to a Visa survey that found in the U.S., 48 percent of people use cards as one of their payment options at vending machines — and of those who prefer card payments, 82 percent cite convenience as the top reason. Millennials prefer to use cards for smaller transactions, namely those under $5.
“Many factors are contributing, but the consumer experience is really the key factor,” Byrne said. “People like having the option to do things themselves and not have to interact with other people to make a purchase.”
The Kiosk Evolution
That preference is evidenced in the 6.1 percent growth forecast for the global kiosk market from 2019 to 2027. Byrne said the kiosk business is in the process of evolving from what he termed “the old world of soda cans and snacks … and is now becoming an integral part of a seamless omnichannel retail experience for consumers.”
Payment at a kiosk is often the preferred option for consumers these days, as kiosks are benefiting from vastly improved designs and are leveraging artificial intelligence (AI) technology to meet consumers’ needs. Meeting consumers’ needs means, too, that use cases will proliferate — as will the settings in which smart kiosks will be found, according to Byrne.
Over the next couple of years, more brands will introduce smart kiosks into their stores, and will extend their brand reach by situating kiosks outside of stores in campuses, hotels and any other suitable locations. Consumers will become ever more familiar with using multiple channels of interaction, from self-service at a kiosk to app-based purchases in-store, as well as advance purchase for pickup, he added.
Smart kiosks also are desirable for the firms that embrace them, as they contribute to the bottom line in two ways, Byrne explained. “They are reducing costs by being able to serve more customers with the same number of, or fewer, staff, and are also very effective in terms of retail space, which is providing huge savings in real estate costs. Secondly, they are producing a strong uptick on the revenue side, as consumers tend to spend more at kiosks than they do with a sales assistant. The change is consumer-led, but businesses are benefiting hugely.”
But against the backdrop where, in at least some situations, unattended retail means cashless transactions, “one big issue is the millions of Americans who still don’t have access to credit cards or checking accounts,” he said.
As Byrne told PYMNTS, when businesses reject cash as a form of payment, their goods and services effectively become off-limits to anyone who cannot access cash alternatives. He noted that Philadelphia and San Francisco have banned cashless stores.
“The latest branch of Amazon Go in New York will accept cash, which is telling,” said the executive. “Amazon says it is iterating and seeing what works best for all consumers, which I believe is a fair approach to the issue.”
All in all, Byrne said, the future for kiosk payments is “very bright.”
“Over time, I think we will stop calling this intelligent vending, and it will become part of ‘intelligent retail,’ where the different sales channels combine to offer the consumer a seamless experience, allowing them to make purchases in whichever context suits them best at the time,” he predicted. “This will promote a completely frictionless experience … I predict that in the near future, some form of smart kiosk will become a part of every consumer’s retail experience.”