Cantaloupe, MSU study finds digital payments outpace cash usage at vending machines

Cantaloupe Inc., formerly USA Technologies, announced findings of a joint study with Michigan State University that found digital payments are now the preferred payment method at vending machines. Increased use of contactless payments helped drive that trend.

[View Image Gallery to see the study's infographic summary.] 

While usage of cash payments was being outpaced by digital payments – magstripe credit cards, contactless credit cards and mobile –  in 2019, on average the number of digital payment transactions per vending machine exceeded those made with cash in April 2020 (137 digital and 135 cash transactions per machine). The monthly digital sales volume per machine in April of 2020 was 47% higher on average than with cash ($235 versus $160).

The study found the growth of digital payments increased steadily through 2020. By November, the average number of payments made in cash that month had decreased from 52% in November 2019 to 40% in November 2020. Meanwhile, as a percentage of digital payment transactions, usage of contactless credit cards increased 57% from 14% in November 2019 to 22% that same month in 2020, with a 9% dip in magstripe credit cards during that same period (86% to 78% of total payments). The joint study evaluated sales and transaction data from approximately 122,000 vending machines connected to Cantaloupe’s digital payment platform across the United States.

“We have been reporting the growth in digital payments and transactions at vending machines for years. However, our research shows that as consumers sought touch-free payment options during the pandemic, digital payments became the preferred method overall, which is evident by the particular growth in usage of contactless credit cards,” said Elyssa Steiner, Cantaloupe's vice president of marketing.

“Now, we believe vending operators connected to our digital payments platform will benefit even more from not only greater sales and transaction volume," Steiner continued, "but increased insights from consumer data which can guide better decisions on products and pricing, streamline operations, and ensure operators are better equipped for the future of self-serve and unattended retail.

Additional findings

Hospitals and military locations show largest annual increases in digital and contactless payments

Primary locations including businesses and professional, industrial, hospital, education, retail and military locations (averaging 25,000 transactions annually) saw significant increases year over year in digital payments. Military locations in particular showed the greatest percentage of digital payments overall compared to cash, including an increase from 83% of all sales in November 2019 to 90% in November 2020.

Businesses and professional settings, which ranked second in terms of digital usage overall, also saw a significant increase in percentage of sales, with 60% in sales being digital in November 2019, to about 65% in November 2020. In the midst of the pandemic, hospitals saw the sharpest rise in percentage of digital sales overall, jumping from 42% in November 2019 to 55% last November.

Contactless payments took up a growing percentage of these increases, particularly in military and hospital settings. The percentage of contactless sales within military locations was roughly 11% in November 2019 but jumped to more than 32% in November 2020. Hospitals increased from 15% in November 2019 to 27% in November 2020.

Low volume machines show growth in contactless payments

Low volume machines, or those with less than $2000 in sales per year, showed increases in digital payments also, led by growth in contactless. While 46% of sales in 2019 were made with magstripe credit cards and 15% were made using contactless cards, in 2020, 57% were magstripe credit cards, and 25% were contactless cards. Meanwhile, cash sales fell year over year as a percentage of sales, representing 48% of sales in November 2019 and only 36% in November 2020.

Interestingly, transactions per machine for magstripe credit card and contactless payments increased about the same amount (11 percentage points) within low volume machines between November 2019 and November 2020. In November 2019, 43% of transactions were magstripe credit card, with 20% coming from a contactless form of payment. By November 2020, 55% of transactions were magstripe credit card, while 31% of the 55% were contactless.

About the study

The study was conducted by Michigan State University’s Broad College of Business – MS Business Analytics (MBSA) program, which provides an educational experience that combines a number of university resources in addressing the study, research, and application of analytics. MSU analyzed data of 122,000 vending machines to evaluate sales activity.

“Cantaloupe brought our students a great opportunity to employ data analytics skills and tools in the MSBA program,” said Julian Guo, Ph.D., assistant professor within the Department of accounting and Information Systems at Michigan State University.

“For students, having opportunities to be able to apply their skills and tools in a real-world business context is critical. Based on the question and data provided by Cantaloupe, the student team were able to deliver a deep data analysis and insights which we hope will help drive real-life business decisions and outcomes.”

About Cantaloupe Inc.

Cantaloupe Inc. is a software and payments company that provides end-to-end technology solutions for the unattended retail market. The company offers one integrated solution for payments processing, logistics and back-office management. The company’s enterprise-wide platform is designed to increase consumer engagement and sales revenue through digital payments, digital advertising and customer loyalty programs, while providing retailers with control and visibility over their operations and inventory. Cantaloupe's customers range from vending machine companies to operators of micro markets, gas and car charging stations, laundromats, metered parking terminals, kiosks, amusements and more.