How QR-code payments can boost your coffee vending business

14 августа 2022

A QR-code is a type of barcode that can be scanned with a smartphone to take the user to a specific website, app, or other digital content. This makes QR-codes an ideal way to provide customers with a quick and easy way to pay for their coffee. All they need is a smartphone with a camera

We’ve all had unfortunate experiences with vending machines. You know, the ones when you didn’t have enough change or the machine ate your euro bill. Or when we begrudgingly had to count our coins to make our purchase.

QR-codes let your customer avoid these embarrassing vending machine moments. By using their smartphone to scan a QR-code, they can quickly and easily pay for their coffee without having to fumble with coins or bills. Cashless payments also mean less time spent taking the money out of your machine. When you operate tens of machines, you’re saving plenty of valuable time.

The popularity of QR-codes as a payment method is ever-increasing. In a 2020 report by industry observers, QR-payments in Europe are expected to grow by around 60% in the coming years. This is a massive opportunity for you to take advantage of.

Let’s start by seeing how QR-codes work, and why you should care about them.

How payments with QR-codes work

Image source: Pexels

QR-code-based payments work by scanning a QR-code with your smartphone, which then brings up a payment screen. You can then enter the amount you wish to pay and confirm the payment. The funds are then transferred immediately from your account to the merchant's account.

So far, it seems similar to a credit or debit card transaction. So, why would anyone bother to use their phone instead?

The number one reason is security. In China, where QR-code payments are the norm, for every 10 million Euros in payments, 1,160 were lost to frauds. In comparison, QR-code payments only accounted for 0.64 € lost to frauds for every 10 millions in payments. That’s a 99.94% reduction in fraudulent losses.

Another benefit is the ease of use. Scan the QR-code, input your payment data, and you’re good to go. You can further speed up the process by linking your credit or debit card, bank account, or PayPal account to your Google Pay or Apple Pay.

This way, you can simply pick your preferred payment method after scanning the QR-code, and you’ll be done. No more fumbling for your wallet or waiting for approval from the bank. All you need is your phone, which most of us have with us all the time. You won't need to sign anything or remember your card’s PIN.

QR-code payments VS POS terminals

Image source: Pexels

POS terminals have been the default choice for in-person payments for years. And they still are. They’re fast, secure, and easy to use. But with the widespread adoption of smartphones, QR-codes have been seeing a surge in popularity.

The question is: when should you rely on a POS terminal, and when does it make more sense to offer QR-code payments?

There are a few factors to consider, let’s see them together.

The people who shop at your vending machine

The target audience of your vending machine plays a key role into this dilemma.

We conducted an experiment on this. We had toys vending machines running either QR-codes plus cash or POS terminals plus cash systems. In both cases, we observed that about 80% of purchases were made through cashless methods, with the remaining 20% paid in cash.

That is because most kids have millennial parents (between 25 and 40 years of age), who are more accustomed with technology. They're more likely to have smartphones and be tech-savvy, so they can easily scan a QR-code. Using a POS terminal or a QR-code to pay is the same for them.

Compare the situation to a vending machine aimed at a more general public, with many people 50 or older who don’t use their smartphone as much. In that case, the percentage of people paying with QR-codes drops considerably.

Your vending machine’s location

Location is another factor to consider. If your vending machine is in a place that sees a lot of traffic, such as a busy street corner or a shopping mall, it’s likely to see people from all ages shop there. In this case, using your POS is the superior option, as it will let a wider range of customers use it.

Meet your customers where they are — don’t leave money on the table.

Price & Turnover

POS terminals are more expensive, both at the start and in the long run. Terminals start at around 150 €. And that’s not counting the costs of installation, maintenance, and repairs. On the other hand, QR code payments are free. Once you have a smartphone or tablet, you can start processing payments right away, with no additional hardware required.

Also, QR-codes introduce lower turnover — about 20% — compared to POS terminals' 30%, thanks to lower expenses and fees. However, there are cases when the higher costs are justified.

For a real-world example, here at SmVend we helped a coffee machine owner implement QR-codes in their machine. Revenue grew by 30%, because people don’t always have cash on hand, but always carry their phone around with them. While that’s great, over 75% of their revenue still came from cash, so they had to visit the machine, withdraw the cash, and then deposit it into the bank.

Thus, they decided to completely drop cash payments in their machine. Naturally, that lost them all of their cash revenues for a few days. But, within a few months, their revenue grew back to what it was after implementing QR-codes for the first time.

Ease of use

This is where POS terminals have a clear advantage. They're easy to set up and use, while QR-code payments require a bit more tech-savvy customers. It’s not that QR-codes are hard to use, but it’s mostly a matter of being used to it. POS terminals have been around for decades. We know that they work and we trust them. Paying with QR-codes is still in its infancy, so it will take some time before people are as comfortable with it as they are with using POS terminals.

This advantage for POS terminals is slowly disappearing, as QR-code payments become more popular. And as we mentioned before, this popularity is driven by the younger generations, who are used to using their smartphones for everything.

So if your target audience is young, QR-code payments might actually be easier to use for them compared to POS terminals.

Versatility

QR-codes can be used for a number of purposes that go beyond payment, such as sharing contact information or surveying customers. POS systems, on the other hand, are all about payments.

POS terminals are still a necessity in many businesses. They offer better inventory tracking and order managing, making them a life savior for more complex systems. But when it comes to vending machines, it’s hard to justify their costs compared to the simplify and flexibility of a QR-codes solution.

Payment systems in EU that support QR-codes

Image source: Pexels

One of Europe’s biggest weaknesses regarding QR-code payments is the lack of a common European standard of payment. To quote a January 2022 report by Copenhagen Economics:

QR-codes used by payment service providers in Europe are not interoperable: a merchant wishing to accept QR-code payments needs to implement different QR-codes for each separate provider.

However, vendors have been working hard to overcome this issue. Here are the ones you can rely on:

Ecommpay
If you’re looking for a payment system in EU that supports QR-codes and every popular payment method, Ecommpay is the perfect choice for you. Through their gate2europe system, they accept payments with Google Pay, Apple Pay, Visa, MasterCard, American Express, Skrill, Neteller, PayPal, and Trustly. Additionally, they accept numerous local providers from various European countries. With Ecommpay, everyone will be able to buy from you.
SumUp
SumUp is a London-based fintech company that offers card payment solutions for small businesses. Through their app, you can easily create a QR code that your customers can scan to pay for their purchases. But it’s a bit more limited than Ecommpay when it comes to accepting payment providers. Digital wallets like PayPal and Skrill don’t work with SumUp.
Zettle
Zettle is a Swedish fintech company that was bought by PayPal in 2018. The company offers a mobile point-of-sale (mPOS) solution that allows merchants to accept QR code payments from all major mobile wallets.

Other applications for QR-codes

Image source: Pexels

QR-codes can be used in a variety of ways, and that’s what makes them so powerful. Payments are only a small part of the functionalities you can add to your vending machines. With a little creativity, you can turn your vending machine into a fully-fledged and self-serving business.

Sounds incredible? Keep reading to find out what you can do with QR-codes.

Simplify vending machine management

Your customers are always the top priority, and anything you do to improve their experience should be a top priority for you. With QR-codes, you can use remote management to keep track of inventory levels, service issues, and customer complaints. This allows you to take action quickly and resolve problems before they become bigger issues.

Here’s a paper with a project of a vending machine that uses QR-codes to generate sales data. You can use the data to know what products need to be refurbished, and when. It also simplifies keeping tracks of what products are selling a lot, and which ones are struggling.

Improve customer support

QR-codes are a great tool for customer support. Use them to answer FAQs, provide contact information, and give customers the ability to report problems. QR-codes are a great tool for customer support. Use them to answer FAQs, provide contact information, and give customers the ability to report problems.

Instead of having your customers pull out their phone and type down your number, which can be time-consuming and frustrating, they can just scan a QR-code and have your contact information right away. This is also useful for customers who may not be able to speak or understand English. You can use QR-codes to provide translations of your products or services.

Advertise your app

If you have an app, make sure your customers know that you have one. You can use QR-codes to link to your app store page. Include the QR-code in print ads, on signs and flyers, or on your website. You can even put them on your products.

Use your app to increase customer loyalty. For example, you could offer a discount to customers who use your app to make a purchase, or who participate in loyalty programs. You can also use push notifications to keep your customers updated on new products, sales, and promotions.

Offer multi-language tutorials

This is one of the most obscure yet useful functions of a QR-code. Let’s say you have a vending machine in an international airport. While it’s safe to assume everyone will have at least a basic understanding of English, not everyone will be fluent.

With a QR-code, you can provide multilingual instructions. Simply create a video tutorial in the languages most commonly spoken by your customers and link to it with a QR-code. When customers scan the code, they can choose their language and get instructions in a format that’s easy to understand.

Survey Your Customers

Get feedback from your customers on their experience with your products or services. Linking the QR-code to a survey is a great way to see what customers think of your products or services. You can create a QR code for your survey using a free online service like Survey Monkey. Once you have created your survey, simply go to the Survey Monkey website and click on the “Create a QR Code” button. Then, enter the URL of your survey into the “Survey URL” field and click on the “Generate QR Code” button.

You can use this data to improve your business and make changes that will benefit your customers. You can also use surveys to learn more about your customers. What do they like? What do they dislike? What do they want to see more of?

QR-code payment solutions are the future — don’t miss the boat

Europe is lagging a bit behind in QR-payment codes compared to other areas of the world. Particularly, the far east & China dominate the QR-payment charts as of now, but vendors are starting to overcome the issues that blocked Europe from advancing in this regard.

QR-codes are projected to drastically grow in the near future in Europe. Right now, they only make up about 3% of total payments in Europe. But since they make up 85% of the payments in China, it’s safe to assume they’ll become much more widespread here too.

QR-code payments are faster, easier, and more secure than traditional methods like cash or cards. And every day, more and more people use them.