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Issue Date: Vol. 48, No.3, March 2008, Posted On: 3/26/2008

MasterCard And USAT Expand PayPass Cashless Capability To 17,500 Vending Sites Nationwide

Nick Montano

PURCHASE, NY — MasterCard Worldwide and USA Technologies Inc. announced last month the expansion of ePort cashless payment terminals to 17,500 vending machines across the country, adding more than 4,000 new locations that accept MasterCard PayPass contactless payments. 

Among the operations expanding or adding USAT’s ePort cashless technology to their venders are Ace Vending, Canteen Vending Services, Continental Vending, Continental Services, Custom Foods and Evergreen Vending, along with McLiff Vending, Mid-Atlantic Vending, Peachtree Vending, Proformance Vending, Sanese Vending and photobooth operator Fantasy Entertainment. Coca-Cola Enterprises has equipped an additional 2,450 vending machines to accept credit and debit cards through the ePort services. 

These installations are located throughout Arizona, California, Florida, Georgia, Illinois, Iowa, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, North Dakota, New York, Ohio, Texas and Washington. 

To make a purchase, the patron simply taps a PayPass-enabled payment card or device on the ePort terminal. The terminal scans the payment medium wirelessly, transmits the information over a wide-area network for authentication, then flashes a light and displays a message to signal the completion of the transaction, all in a matter of seconds. Traditional magnetic-stripe cards are also accepted. 

The move to expand cashless deployment in vending machines has been driven by positive feedback from consumers, vending operators and soft drink bottlers, as well as the increased sales made to these consumers at machines that accept contactless payments, MasterCard and USAT officials said. 

“The ability to offer credit and debit card payment options to vending has had a big impact on business performance with vending machines equipped with the ePort,” said USAT chairman and chief executive George Jensen. “This includes 20%, 30% and in some cases 50% increases in year-over-year sales revenue growth.” 

Jensen said that USAT’s latest performance report illustrates that cashless payments are helping vending operators and bottlers improve profitability. 

In February, USAT posted record revenue for the fiscal 2008 second quarter, ended December 31, 2007. Revenue for the three months totaled $3.46 million, an increase of 72% when compared with $2.01 million for the corresponding quarter in fiscal 2007. This was the second successive quarter of record revenues in the current fiscal year. The revenue total does not include the recent expansion of ePort deployment, which is expected to be included in the next quarter’s results. 

Second quarter profit was $1.04 million compared with $284,189 for the three months ended December 31, 2006, an increase of 267%. Margins for the quarter expanded to 30% compared with 15% for the same period a year ago. Recurring license and transaction fees rose to $828,342 from $357,408, an increase of 132%. 

USAT said it processed approximately 2.4 million transactions totaling more than $7.7 million during the quarter ended December 31, 2007, compared with approximately 737,000 transactions totaling over $4.7 million in the quarter ended December 31, 2006. This represents an increase of 226% in transaction volume and 64% in dollars processed.

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