November 25, 2015
USA Technologies is a leader in wireless, cashless payment and M2M/IoT telemetry solutions for small-ticket, self-serve retailing industries. The company provides a broad line of cashless acceptance technologies including its NFC-ready ePort G-series, ePort Mobile for customers on the go, and QuickConnect, an API Web service for developers. USA Technologies has been granted 87 patents and has agreements with Verizon, Chase Paymentech, Visa, MasterCard, and customers such as Compass and more. Last month at Money 20/20, the company announced the expansion of MORE, its loyalty & rewards program to partners nationwide. LTP recently had the opportunity to interview Mike Lawlor, SVP of Sales and Biz Dev, USAT. LTP: Can you walk us through how MORE works? Mike Lawlor: MORE is a local platform which has been built on our own network. It enables all of our clients to not only to accept all firms’ electronic payments but also to offer loyalty. The MORE rewards and loyalty program provides access to custom rewards and discount programs for all 333,000 locations connected to the ePort Connect service. MORE was originally designed to provide USAT customers the ability to offer custom rewards and discount offers for products purchased at their ePort-enabled locations for loyalty, repeat business and a greater understanding of their consumers' purchasing preferences. MORE positions customers of USAT to better compete with traditional retailers who are capitalizing on the benefits of loyalty & rewards programs, and it gives strategic business partners immediate access to USAT's large, nationwide footprint of acceptance points.
It’s all about allowing our customers to engage with their consumers and allowing them to reward their behavior for encouragement.
LTP: So, this year, because we are talking to a lot of people, we can pretty much say that loyalty & rewards is the primary trend; this platform seems to be aligned to that.
ML: Yes, it is the whole idea of loyalty and consumer engagement, as in how you take the consumer relationship to another level and provide your consumer with relevant promotions & offers that encourage positive behavior.
LTP: Just for the sake of LTP readers, can you describe your products & services a little bit? What are the segments that you focus on?
ML: We provide a solution that really takes the world of unattended cells of retailing, which historically has been cash-based business, into the world of electronic payments. And there are several components to that – from the wireless point-of-sale solutions that we provide them, to providing them turnkey wireless services where we have partnered with Verizon. But really, the services are at the core of what we do. So it’s processing the transaction & using a simple, flat blender rate like Square does, which we have been doing since last 20 years. We provide all the data services, we capture all the information from these machines so that it can be reconciled to understand the sales for better and effective running of businesses. So between wireless POS terminals, wireless services and processing data services, they can install that and it's ready to go in five seconds because it’s all one supplier.
LTP: Do you do your own merchant acquisition? As in, do you go and acquire these customers?
ML: We do. We have a sales organization and we use both direct sales and OEM distribution partners. We do the acquisition through direct sales and through indirect channels.
LTP: In terms of the services, there is a lot of analytics done to understand which products are moving fast and which ones are remaining on the shell. Do you provide any such services?
ML: Yes, we probably have the most extensive cashless knowledge base. We capture all the cash transactions, so we understand the consumer to the end degree and we provide that data back to our clients so that they can better understand their consumer behavior – as in, what they’re spending, is it cash or cashless, and if they do use cashless, what are their behaviors, etc. What we have seen so far is that when a consumer uses debit, credit card, Apple Wallet or Android Pay, they are actually spending 30% more. We have a knowledge base which we have been putting out annually, but we’ll move to putting it out quarterly; it has got a lot of data which can help businesses. So what has set us apart is our set of data services and knowledge base. We can give the guidance to the markets that we serve on how well and where cashless is running for them. We actually have 2 million transactions between cash and cashless networks every day; we analyze that data and we provide it back to our clients and the marketplace at large to drive more adoption of cashless electronic payments. We have a relationship with Android Pay and Apple Pay as well.
LTP: There are going to be many of these XYZ pays like Samsung Pay, Apple Pay, Chase Pay, etc. Are you going to enable all of them or are you going to take a call in terms of which is the higher priority?
ML: We want to try and incorporate all the prevalent forms of consumer payments that are there. We moved into NFC several years ago and we have worked with MasterCard and Visa with the launch of PayPass and PayWave respectively; Apple and Google followed suite. But as more and more different forms of electronic payments come – whether it’s Chase Pay, QR code and things like that – we would want to try and figure out to incorporate it as a part of our hardware platform as well as our back-end processing services.
LTP: What percentage of your deployments is actually NFC-enabled?
ML: We have the largest footprint of NFC-enabled machines. I think we are approaching quarter million. We have around 330,000 machines connected to our network, out of which 200,000-250,000 are NFC-enabled. And that is why companies like Google and Apple would want to work with us because we provide the consumers having these wallets, the ability to use it for everyday spending. So they can walk up to any machine, a vending or a laundry machine – things that they use every day – and give their consumers the ability to use their wallets.
LTP: Our understanding is that to do a loyalty program you have to actually get the profile of the consumer. If they are doing cash payments and then how do you do that.
ML: Cash payments are a little challenging. It is hard to do that, so that is why the loyalty program has to be done with some form of electronic payment like credit card, debit card or some other identifier. Hence, cash is a little challenging.
LTP: When someone pays with Samsung Pay or Apple Pay, do you get to know who the customer is?
ML: As you know, Apple Pay is a little challenging because of the tokenization process. So we’re trying to work through that right now.