Cashless Society: Vending Machines and Plastic

Cadbury Schweppes and MasterCard are testing 750 vending machines in the Dallas area, New York and Chicago to answer a key question: Will people spend more at vending machines if they can use plastic? The early answer is, yes.

Some of the machines were installed in January and have seen sales increases of 5 percent to 35 percent without any change in prices, said Mark Jackson, a vice president with Cadbury's U.S. beverages subsidiary.

Cadbury's experience fits with sales increases that other companies have reported when they shift from cash to plastic. Possible explanations vary from consumers not wanting to carry change to ATMs that dispense only $20 bills, which can't be used in most machines.

Cadbury is retrofitting machines in Dallas, New York and Chicago to take all major credit cards and debit cards. They still accept cash, too.

After three months, Cadbury will evaluate sales data and decide whether to retrofit more machines and introduce them in other cities.

''There is always going to be a degree of cash transactions,'' Jackson said. ``But we recognize the fact we're moving more and more to a cashless society. We wanted to offer consumers a convenient way to buy our products out of a vending machine without having change or getting change.''

According to Vending Times, an industry publication, vending was a $46 billion business in 2005, and it was virtually all cash. That makes it an appealing target for banks that issue credit cards.

Tests like Cadbury's are taking place now because the declining cost of wireless communications has helped make operating the machines economical.

''Vending is going to be the ultimate test for cashless'' transactions, said Nick Montano, executive editor of Vending Times. ``It's going to be five or 10 years before it really takes off.''

via Miami Herald