September 16, 2013
In 2012, there were around 500,000 to 700,000 smart technology vending machines in operation in the U.S according to a report by Frost & Sullivan and this number is estimated to increase to 2 Mn by 2018.
In Japan, which has the highest number of users of mobile wallet in the world, 90% of the vending machines are enabled to accept mobile payments; accounting for $50 billion in sales during 2012. This figure was abysmally low in the case of U.S whose vending machine sales account for $15 billion in 2012, since only around 5% of the vending machines accept mobile payments.
Generally while enabling mobile payment service on the vending machines they need some changes to the hardware or interface of the equipment. LikeUs Network, a vending machine hardware company, unveiled a new and unique mobile payment device for all vending machines which doesn’t alter hardware setup of the vending machines. The mobile payment device was launched at TechCrunch Disrupt SF on 11th September 2013. LikeUs was founded in 2011 by Ray Hernandez (CEO) and Keyston Clay (CTO). The company added Billionaire Mark Cuban as Investor the same year.
A unique advantage about the device launched by LikeUs Network is its plug and play feature. Their wireless node is integrated easily to the chipboard inside the vending machine. The device connects itself to the LikeUs secure network. Mobile payments are enabled without any external alterations to the machine itself and not a single setting on the vending machine has to be changed.
Apart from providing an excellent plug and play solution for mobile payments, the new device enables customers with the ability to exchange social media promotion for free goods. Users will have to download the company’s app which they can then use to obtain free products (appetizers, soda, etc.) by connecting to, and sharing on Facebook. The app calculates loyalty points for the customer when a user shares purchase details. Using API’s like ‘Facebook Connect,’ vending machines are provided with significant data such as the number of drinks sold per day, week or month.
LTP View: LikeUs is a great concept as it combines offline world to online world in a seamless fashion. Its a social bartering system, available at vending machines, parking meters, retail pos and provide analytics to advertisers and provides typical CTRs of 30-60%. Companies like LikeUs Network may help in increasing the percentage of vending machines which accept cashless payments. The plug and play feature eliminates the cost of modifying a vending machine to install mobile payments technology, which is otherwise a concern for providers. This may help in a large scale deployment of vending machines which accept cashless payments. Their loyalty program which offers rewards to users for sharing and promoting on Facebook may also prove to be a means to create awareness amongst vending machine users in USA.