Unattended self-service terminals and kiosks are all the rage right now. They can be great way for a business to take payments in areas where it is not cost-effective to provide a cashier or clerk. Think, a vending machine in an office building or at an amusement park. And since no one carries cash anymore, it makes sense that these kiosks be setup to accept credit/debit cards.
First, it was the unattended automated fuel pumps at the gas stations that started taking credit cards. And ATM’s, of course. Then, there were toll roads, snack/soda vending machines, grocery stores, car washes, movie rentals, parking meters, laundromats and many others that joined the self-service kiosk craze. Now, they seem to be everywhere. Stadiums are taking concession orders, fast food chains, car charging stations, mobile phone charging stations, city bike rentals and even pay toilets (yes, pay toilets!) are offering unattended kiosk technologies. Almost every industry has supported or is beginning to support unattended kiosks. Even the California DMV, dubbed as having some of the longest customer wait times, has had success in adopting kiosk technologies, as explained in the article below from PYMNTS.com.
https://www.pymnts.com/vending-machines/2018/dmv-california-kiosk/
There are endless technologies emerging to support this rapid transaction growth, and huge transaction numbers. In the vending space, leaders in technology are USA Technologies, Coca-Cola, Apriva, and many others. In parking, there are mobile/POS solutions like IPS, Cale, Parkmobile, Parkeon, and many others. They come in various payment environments, too. Most solutions are card present and support EMV, but others have adopted mobile/e-commerce technologies.
But there is one problem. Unattended small ticket transactions are extremely expensive to process credit/debit cards. Due to the large effect of a per item fee, processing and interchange fees can erode your operating margin. In the past, I had worked with a city government that had seen their payment fees alone take up over 20% of their operating costs on many of their parking meter transactions. This is mostly due to the Durbin Amendment capping interchange rates at 0.05% + $0.22 per transaction. After the Durbin Amendment, a $1.00 parking meter transaction costs $0.22, even before considering their processor’s fees, which may also be per item based. Compounding to that, the sales dollar volumes on these devices are small for many corporations or municipalities, so these high costs may be flying under your radar.
Another large factor is the cost of the terminal and devices themselves. Unattended technology is more expensive. It must be secure, EMV compliant, support contactless, and oftentimes it needs to be able to withstand weather, theft, damage and many other factors.
However, considering all of these factors, the growth continues. As a millennial and payments consultant, I am excited to see this technology grow so quickly. But, for now, I will stick to the establishments that do not charge for pay toilets.
Are you seeing effective rates over 5% on your small ticket transactions? Contact OPC today to help you realize best-in-class interchange rates and processing fees for your unattended kiosk solutions.
