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Getting a Fix on Which Way the 'Vend' is Going (Conclusion)

Due diligence is in order before making payment system switch

CHICAGO — For the longest time, a customer in a self-service laundry washed or dried their clothes by inserting a preset number of coins or tokens into a mechanism connected to a washer or dryer. That’s still true today but as technology has taken greater hold, so too have the options for paying.

Payment by coin is still the preferred method used in Laundromats today but the share of cashless (coinless?) stores is growing larger by the year.

Depending on the system used, customers can transfer a dollar amount to a “store card” or “loyalty card” (using cash or a credit/debit card; systems vary) that is then used to start a machine, or can use a credit, debit or EBT (electronic benefit transfer) card to start one. Some systems enable stores to accept coin, credit card, store or loyalty card, or a combination.

And let’s not forget the newcomer: app-based payment platforms that allow customers to pay for wash cycles and dry time using their mobile devices.

Store owners are seeing the advantages that cashless payment systems offer but still believe in offering coin payment, too. But what about cashless overtaking coins as the preferred payment method used in Laundromats? Do you think that will happen?

American Coin-Op interviewed experts from nine companies that offer payment systems and related products. Let’s hear what they have to say about today’s payment trends and where they see things going as technology and customer preference evolve.

Part 1 of this story looked at card/mobile options gaining ground on payment by coin, part 2 at COVID-19’s impact on payment trends and the benefits of going cashless. In today’s conclusion, we examine due diligence before adopting a new system, and payment trend predictions for 2025.

QUESTIONS TO ANSWER BEFORE MAKING SWITCH

If a laundry owner is considering switching to a different payment system, whatever it may be, what are some basic questions they should ask before making the change?

“Will this product adapt to all of my machines? Does it offer all the reporting features I need to manage my business efficiently?” suggests Steven King, West Coast regional sales manager for Greenwald Industries, which offers a range of payment solutions from coin vending to smart card systems and payment apps. “Are the costs reasonable for my sales volume? How am I paid on mobile and credit applications? Is the product easy to use and will my customers use it? Will it save me money?”

“If and how the technology of the system will increase their revenue,” says Jacob Lefkovits of payment systems provider The Laundry Pass.

“How long has the manufacturer of the payment system you are considering been in the vended laundry market? One thing we know from the past few Clean Shows is that payment companies come and go in this industry and you don’t want to get stuck spending your money on a system that won’t be around or supported in a couple of years,” says Michael Schantz, president of Setomatic Systems, whose company offers a system that accepts all forms of payment..

He also suggests learning if the card reader you want to install accepts the latest trends in payment so it does not become obsolete, and the kinds of loyalty programs the system in question can offer.

“What are you looking to accomplish?” asks Charlie Pasquale, CEO of BCC Payments, which offers a cloud-based integrated payment, control and POS system. “There are many different pricing models, services and customer management concepts that come into play.”

“The first consideration must be whether to go with a hybrid system, to accept a combination of coins and loyalty or credit/debit cards, or to go completely coinless and operate as all card,” advises Wayne Lewis, CEO of ESD, maker of a diverse range of payment system products from coin to mobile. “The second question is whether to accept credit/debit cards directly at the machine level or through a Value Transfer Machine for loyalty cards.”

“Success of any payment format is measured by whether customers adopt and use it,” says Butch Bruner, president of Imonex Services Inc., which offers coin and token acceptors. “The question of what percentage of sales can be attributed to a particular pay option can be very telling. Inquiring about formats with the flexibility to use a laundry’s existing pay infrastructure is prudent, as is asking if both the coin and cashless system components can accommodate future needs.

“Rising labor costs beg the question as to whether a particular hybrid or cashless format can operate without trained staff on duty. And posing questions to other owners on their experiences interacting with the provider’s technical support team can help gain insight.”

“To what degree does it reduce my time managing the store?” posits Oleg Stepanov, representing payment systems provider Mitech Integrated Systems (Laundroworks). “How simple is it to pay for a machine or reload the account balance (if applicable) and what is the exact process? … How reliable and resilient is the technology?”

“It’s important that owners do their homework, and research products in multiples ways; don’t rely on a single data source for information,” advises Steve Marcionetti, president of Card Concepts Inc. (CCI), which offers laundry card payment, marketing and management solutions.

He also says the cheapest option is often not the least expensive. “The old adage of ‘You get what you pay for’ is just as true with payment systems as it is with anything. Be sure to evaluate the full value proposition before making a decision.”

Paresh Patel, founder and CEO of PayRange, which offers a mobile payment solution, identifies security (has the system been tested with countless secure transactions and does it confidently offer peace of mind?), responsibility/liability (are you required to run your own servers and/or have your own merchant accounts?) and “future-proofing” (is it a single solution or is it a scalable solution that can grow with your company and change as the consumer changes?) as areas of inquiry.

HOW CLEAR IS YOUR CRYSTAL BALL?

How will payment systems used by vended laundries have changed in, say, five years?

“It’s totally controlled by the Laundromat owner and it will stay the way the owner wants,” says Lefkovits, who believes most Laundromats will have switched to membership card-based systems.

“Payments are payments whether I go buy something at Walmart or go to the laundry and start a washer or dryer,” Schantz says. “Customers want it to be easy, fast and secure, and what better way than to use your contactless credit/debit card which has become the payment method of choice all over the world.”

“It is our hope that mobile payments become the new standard in vended laundry over the next five years. If 2020 has taught us anything, it is that you never really know what is coming down the line,” says Patel. “We’ve seen arguably a year’s worth of adoption over the past three months as a response to the pandemic, so it is difficult to say where we will be five years down the road.”

“We believe that the use of contactless payments, either through the use of contactless credit cards or mobile apps, will be implemented in a high proportion of self-service Laundromats,” Lewis predicts.

“I don’t see why mobile payment will not be the dominant form of payment,” says Pasquale. “We see credit and cash reload stations with customers starting their machines with mobile devices.”

“The only thing that ever replaced coin’s popularity in vended laundry was a higher-denomination coin,” asserts Bruner. “Our industry saw dimes make way for quarters, and over the next five years we’ll see those quarters continue to be replaced with more and more dollar coins, helping simplify payment for customers and collections for owners.”

“Options and flexibility will be the most important factors for payment systems in the next five years,” says Michael Thessin, Midwest Region sales representative for Greenwald Industries. “Payment technology continues to evolve. Keeping up with these changes will be critical for businesses to maximize revenues. Coin will be part of the market for many years, while mobile pay and credit card payment continue to grow.”

“If there is one thing I’ve learned in my 20 years in this business, it’s that nothing happens quickly,” Marcionetti says. “Five years from now is not that far away and I expect any change to be moderate. I expect a steady increase in coin-only locations implementing an alternate payment option, mobile payments will continue to grow in popularity, and it’s likely we’ll see changes in the number of suppliers of these products.”

“I don’t see any reason why the trend would change course: more card stores, more electronic payments, more mobile,” says Stepanov.

Missed earlier parts of this story? You can read them here: Part 1Part 2