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The Honolulu Advertiser
Posted on: Wednesday, December 26, 2001

Vending machines soon may accept credit cards

By Theresa Howard
USA Today

PepsiCo Inc. will roll out a series of vending machines this week in Memphis, Tenn., that will accept credit cards and let bottlers track sales online.

Bloomberg News Service

NEW YORK — Buying soft drinks and other products from vending machines will be as easy as the swish of a credit card if Pepsi and other marketers have their way.

The emergence of third-party software firms with the ability to authorize and expedite the transactions has eroded credit card companies' unwillingness to handle purchases under a dollar. The No. 2 soft drink maker plans to roll out wireless credit card acceptance at its 1.2 million machines in North America.

"We would ultimately like to get this on all machines," says Todd Piatnik of Pepsi, which is working with U.S. Wireless Data to test wireless, cashless technology in Memphis, Tenn., in 200 Pepsi machines.

Vendors say the technology could help them keep machines stocked (by providing inventory reports to warehouses) and enable consumers without cash — or change — to make purchases from the machines.

Some estimate that cashless vending could boost sales by as much as 20 percent per machine.

The vending industry represents no small change. It raked in $38.6 billion in sales (mostly food and beverage) last year. Such figures have prompted many companies to consider the technology.

For instance:

  • Kodak. Through a pact with Stitch Networks made last January, the film and camera maker has set up 200 cashless vending machines in amusement and theme parks and high-traffic tourist destinations nationwide. The machines sell film and one-time-use cameras. Twenty will be plugged in at the Olympic Village in Salt Lake City.
  • Coca-Cola. The No. 1 soft drink maker, with 1 million vending machines in the United States, is testing wireless technology in Japan, where machines dispense Coke and movie tickets.
  • M&M/Mars. The candymaker offers its products in 92 percent of its vending machines and has 4,000 of its own branded machines. The company is aggressively pursuing wireless, cashless purchases.

"Eventually we want to get to that cashless method, whether it's with credit card, cell phone or some type of internal debit card," says spokesman Scott Hudler.

While credit card firms will be happy to have credit cards accepted at vending sites, they're not willing to bear the cost of finding the technology for it. "To this point we have not put any resources behind that," says Armen Khachadourian, Visa's senior vice president of new market development.