Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Apple Pay is coming to a Vending Machine near You

Many Americans will be able to use Apple Pay at the vending machines in their workplaces in coming months. USA Technologies (NASDAQ: USAT); which provides mobile payment solutions for vending machines, is now supporting Apple Pay.

Apple Pay users will have a choice of paying with credit cards, their bank account balance or funds from their paycheck with USA Technologies’ MORE loyalty and prepaid program, a press release indicates. That program provides employees with prepaid cards that can be funded via their paycheck check.

Users can also receive and redeem loyalty rewards through Apple Pay using MORE. That means the more a customer buys, the more rewards he or she gets.

Why Apple Pay is coming to a Vending Machine near You

By partnering with USA Technologies Apple (NASDAQ: AAPL) gets access to nearly 300,000 vending machines located in breakrooms and businesses across America. It also gets access to USA Technologies’ expertise in vending and a test platform for the expansion of the payment solution.

More importantly it can introduce Apple Pay to millions of would be customers via vending machines. Apple has struggled to get the solution adopted in America, with major retailers like Walmart saying no to Apple Pay. Servicing vending machines; which are located in many American workplaces, is a great way to get people used to the service.

Equally important is the way in which Apple can test the use of Apple Pay at vending machines. If it is successful in USA Technologies’ machines, Apple Pay can be adapted to the Redbox video rental machines, which are found at almost every supermarket in the United States.

Redbox’s owner; Outerwall (NASDAQ: OUTR), rents DVDs and video games through the machines. Redbox is the primary supplier of entertainment for many working class households in the United States and Canada.

Are Vending Machines Apple Pay’s Future?

Vending machines can also be an important market for Apple Pay in Japan and China where they distribute a wide variety of products. Japanese vending machines even sell umbrellas, and underwear.

If it can successfully support Apple Pay, USA Technologies will be in a position to add other payment apps such as Android Pay, Microsoft Wallet, Chase Pay and Walmart Pay. That can give it new streams of revenue, and a chance to move into generalized retail.

Another potential use for such solutions is to develop pickup lockers where customers can use a payment app to pay for merchandise ordered online. The merchandise is placed in a locker in a public place; such as a convenience store, where it can be easily accessed by consumers. Walmart is already testing such lockers in Canada and the United Kingdom.

Vending machines might become the venue by which payment apps; such as Apple Pay, finally reach a mass market in America. The ability to pay for soda pop and snacks at the office; might get average people to finally start using Apple Pay.