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Issue Date: Vol. 44, No. 4, April 2004, Posted On: 4/8/2004

Computer Technologies Reinforce Security, Enhance Patron Options

Tim Sanford

U.S.A. - The present economic recovery is being accompanied by increasingly widespread operator acceptance of the data storage and communication systems developed, and extensively discussed, over the past decade.

The use of microelectronics to consolidate the capture of audit and sales information on the vending machine controller board has received the most attention in recent years. The Vending Industry Data Transfer Standard, a refinement of the data exchange/uniform communication standard (DEX/UCS) developed for direct store delivery, and thus generally called "DEX" , has undergone steady refinement on the basis of real-world experience.

Now provided on new equipment from major manufacturers, DEX data capture capability also is retrofittable to nearly all electronically controlled machines presently in use. Among the standard data storage fields provided by a DEX-compliant controller board or retrofit module are "cumulative" and "interval" transaction records.

These data fields are the digital equivalents of the non-resettable and resettable meters that have been the traditional basis of vending audits. However, DEX information is immediately available for retrieval by a handheld computer or by remote polling, without the need for transcription. The records are tamperproof, and can be matched with item-level records of machine inventory for immediate cash-to-merchandise reconciliation.

It is natural that this technology has been the aspect of applying computer "intelligence" to vending that has attracted the most attention. DEX is the starting point for workable solutions to three long-standing challenges:

* Curbside polling. The route driver can upload the actual inventory of each machine in a location while pulling into the parking lot, then bring in just what's needed for restocking.

* Cashless vending. Giving a vending machine the ability to communicate with a remote host is necessary if it's to access the transaction processing networks that support retail credit and debit card merchant terminals. The cost of that data communication can be recovered more rapidly when the capability also can be used for remote auditing and sales analysis, the tasks that DEX is designed to standardize.

* Menu optimizing. Fully implemented, a DEX system records sales by column or spiral, and so can be used to create and maintain a database of sales activity by item (stock-keeping unit, or SKU, in retail parlance). Since this information need not be recorded manually at the machine, it can be obtained without slowing the driver down. And it can be used to produce reports identifying the fastest and slowest moving products, so the latter can be replaced by something with greater appeal. And item-level information is very valuable in determining brand share and assessing the effect of promotions, new product introductions and the like. Other retail channels have found that the ability to provide this information builds mutually beneficial relationships with suppliers.

While all this has been moving forward, there are a number of other areas in which "intelligence" has been applied to vending. Two of them are electronic locks and  prepaid cashless vending.

Electronic locks offer answers to two long-standing problems: making sure that an individual authorized to have a key only uses it for the authorized purpose, and dealing with lost or stolen keys. Both can be considered aspects of key control.

Early proposals for "smart" locks involved tying the lock into the machine's power supply and control logic, with the key carrying an authentication code that the lock could read.


However, recognizing a demand for standalone systems that would not depend on compatible vender logic, the designers of today's most popular systems transferred much of the "intelligence" (and the power supply) to the key. For example, Medeco's "NexGen" lock, developed specifically for vending, works with a "collection/audit" key powered by an off-the-shelf battery that can power several months of lock openings. The memory in the key is not battery-dependent, and remains intact if the battery fails. It's programmed and read by Medeco's "VendSecure" software.

An electronic locking system's key can be programmed to retrieve the recent adventures of the locks it opens, as well as its own usage history.

Software supporting the electronic lock system can print reports detailing the history of each key (and each lock), and this information can be exported for use by the operating company's management software. Thus, data from both systems is shared at the back end rather than at the front.

An electronic lock system allows a key to be assigned to one person for designated uses during a specified time period. The usage history shows which key was used at what time to open (or attempt to open) which lock. As an example, the Videx "CyberLock" system's "CyberKey" can be programmed with an individual schedule specifying the days, and times, when the key will work. Holidays may be programmed as exceptions. Videx "CyberAudit" software is used to program the keys and to retrieve data from them. The Videx vending lock is part of a spectrum of "CyberLocks" for a range of access control uses, including safes.

Used in parallel with DEX, each driver might start the day by picking up an electronic key and a handheld computer. The key would be programmed for the machines on that day's route, perhaps only for the period of time required to run it. The handheld computer would serve as an electronic route ticket, detailing the machines to service and the inventory levels for the products in them. At the end of the day, key and handheld would be returned and plugged into the office computer to upload records of the day's events. And the company's management software would receive and integrate the information from both.

Electronic locks do not have keyways, so they cannot be picked; and the keys cannot be duplicated. If one is stolen, reprogramming the locks is much more straightforward than changing or rekeying lock cylinders , and this will not be necessary if the key has been programmed for a short period of activity, as the key will render itself harmless before it can be misused.


Cashless payment systems for affinity-group environments like factories, office complexes and hospitals also are benefiting from increased "intelligence." Systems using small, rugged memory devices are extending the early success of traditional prepaid cards in these settings.

Systems based on in-machine merchant terminals for national credit and bank debit cards are becoming more practical with improvements in wireless data communications and software that can batch small transactions to reduce processing costs, driven by the increasingly widespread adoption of card payment options by retailers responding to fast-growing consumer demand.

The microchip-based cashless media architectures do not require those data networks, nor the third-party processing services that provide the authentication for conventional credit and bank cards, and manage the electronic funds transfer.

When an affinity-group location requires credit or bankcard acceptance, access to a phone line is all that's needed to install one terminal that allows patrons to add value to their payment devices in sums large enough to be economical to process, and then use those devices at any vending machine. As an example, eSecure Peripherals' "CK2000" system includes a cash-and-card "eCash Station" as well as a cash-only version, at which holders of the "iButton" payment media can add credit.

In addition to offering patrons the convenience of making their vending purchases without having to deal with change (in or out), cashless payment systems reduce the operator's vulnerability to theft by removing money from the machines. This also speeds service and streamlines control by eliminating the need for cash handling.

Many of these benefits can be enjoyed by equipping a single machine (or installing a single terminal) to accept banknotes and revalue customers' payment media. One example is a charger for Paykey USA's "Pkey" payment media, which allows an in-machine validator to do double duty as a revaluing terminal, supplementing the Paykey "RCS100" standalone recharge station.

Again, DEX capability is a valuable complement to cashless vending payment tools; its comprehensive audit capabilities simplify the task of reconciling collections with removals from inventory when some payments are made in cash and others are not. However, these systems also possess "intelligence" of their own.

Over the past few years, there has been much talk of "pervasive" computers, small data processing modules built into household appliances and personal accessories for greater versatility, ease of use and interoperability. Something of this sort is becoming widespread in vending.

As it does, the once distinct (although adjacent) realms of physical security and accountability have blended into a mutually reinforcing array of profit protection tools. And the technologies that make them possible not only render route service more efficient, but also allow operators to offer customers a wider range of choices from more reliable machines.

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