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What Do We Talk About When We Talk About Money?

Posted On: 5/29/2012

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cashless vending, payment trends, mobile payments, bulk vending, vending machine business, vending, bulk vendor, coin-operated, coin machine, coin-op news, Vending Times, Hank Schlesinger, cashless transactions, ATMs, debit card, credit card

A month ago, I observed a group of four or five youngsters, all of them a year or two away from becoming teens, on an afterschool-shopping spree at a neighborhood grocery store. After picking out their purchases, one of them was designated to pay the bill with a debit card. News from the storeowner that the card reader was out of order sent made the group angry and bewildered. All of them had debit or credit cards, one or two might have had a few dollars in notes, but none had enough cash to cover the bill.

After a short conference, one group member was chosen to use his debit card at the store's ATM. Bad luck. The store's ATM was out of order, too. The group convened again and then exited the store grumbling in protest. The store had not lost a large sale, perhaps $12. However, it was a stunning demonstration of what the future might hold.

We've known for a while that cashless transactions for small-ticket items are becoming more popular. And now that trend has reached youngsters who fall into an important bulk vending demographic that we call "tweens." Granted, the young consumers I saw were solidly middle class New Yorkers. Still, I suspect they are what marketers refer to as "early adopters" -- at the forefront of a larger trend. For them, cash seemed like a foreign concept. Paying cash was viewed very much as an inconvenience, a hassle.

In the long run, this trend could prove disastrous for bulk vending, even though purchases at machines are done on impulse.

After speaking with parents, it's easy to see what's driving the trend. They prefer their kids to use debit or credit cards. It allows them to track their kids' spending closely and provides peace of mind knowing they have enough money for emergencies. As for the kids, using debit cards is as normal as texting. This is certainly a long way from just a few generations ago when junior executives would proudly flash a Diners Club card (remember them?) to pay for business dinners.

After a quick and decidedly unscientific survey, I discovered that cash is still king in low socioeconomic neighborhoods. I suspect that bulk operators who serve these areas have not seen a significant drop in cashboxes compared to areas where plastic is used frequently. But even in these areas, it may only be a matter of time before debit cards come into use among youngsters. The "cash only" signs that were once ubiquitous in these neighborhoods are becoming more difficult to find.

Future trends are difficult to predict. The future can be debated endlessly, though it may be helpful to consider that payments and purchases have all been trending toward ever-greater convenience for centuries. For the vast majority of consumers, it doesn't make a bit of difference whether dollar value is stored on notes or coins carried in a pocket or accessed with a thin plastic rectangle. But it's the million-dollar question for bulk vending operators.