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Getting a Fix on Which Way the 'Vend' is Going (Part 2)

Interest in contactless payment spikes due to COVID-19

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. In Part 2 today, we look at COVID-19’s impact on payment trends and the benefits of going cashless.

COVID-19 IMPACT?

Has the coronavirus pandemic had any impact on payment trends?

“Contactless ‘anything’ is a common conversation that every consumer and business is engaged in,” says Steve Marcionetti, president of Card Concepts Inc. (CCI), which offers laundry card payment, marketing and management solutions. “There is no question that options that reduce the number of times a customer has to touch cash or coins benefits a store equipped with an alternative payment option.”

“The pandemic will motivate many owner/operators to convert or add newer payment options,” believes Wayne Lewis, CEO of ESD, maker of a diverse range of payment system products from coin to mobile. “There will also be an increase in the wash-dry-fold service aspect of the industry as more individuals will desire to limit exposure to environmental conditions.”

“More Laundromats will look to switch to a card system as it eliminates the handing over of cash from person to person and therefore decreases the risk of transmitting bacteria,” says Jacob Lefkovits of payment systems provider The Laundry Pass.

“According to Visa and MasterCard, there are already over 175 million contactless credit cards in the hands of consumers in the United States and the usage … is skyrocketing, up more than 150% since November,” says Michael Schantz, president of Setomatic Systems, whose company offers a system that accepts all forms of payment. “This is the simplest, fastest, and most secure way to pay. Now more than ever, customers want to get in and out of the laundry as quickly as possible with limited touch points.”

“Limited bank lobby access has led more apartment dwellers to drain Laundromat changers of quarters they need to do loads back home, resulting in greater interest among operators for payment formats employing dollar coins and tokens into the mix,” says Butch Bruner, president of Imonex Services Inc., which offers coin and token acceptors.

“In a lot of ways, it has accelerated what was already trending,” comments Paresh Patel, founder and CEO of PayRange, which offers a mobile payment solution. “While mobile and contactless payments were on the rise, they quickly became a main priority for operators — and really for everyone. With so many concerns about spreading illness, businesses had to find ways to take payment without having to touch anything and that is where mobile apps came in.”

“Overall, we have seen an increase of companies moving to cashless solutions as people maintain social distancing and are wary of potential problems in accessing cash and coins,” says 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.

THE BENEFITS OF CASHLESS

What benefits can a hybrid coin/cashless system or fully cashless system offer a laundry owner today?

“No quarters to collect; more payment options like credit/debit card/EBT/mobile; remote diagnostics of system and customer issues; an easier and more contactless experience for the customers, and a text notification when laundry is finished,” lists Oleg Stepanov, representing payment systems provider Mitech Integrated Systems (Laundroworks).

“Hybrid or cashless systems offer much more than just payments,” explains Schantz. “Most systems incorporate various loyalty programs, full accountability, washer/dryer machine availability and many other useful features.”

“Aside from the convenience for the customer, there are powerful marketing benefits that can encourage a higher spend, attract new customers, and encourage loyalty,” Marcionetti says. “The reporting detail that comes from these systems allows operators to make more informed decisions about how to price their equipment, make changes to equipment mix, and manage employees.”

“While most everyone has a smartphone these days that they can use for mobile payment, there are still a few that will not,” Patel says. “There will also be some customers that may not have a card they are able to use. For some locations, it may be necessary to accept different types of payment so all customers are able to pay.”

“The hybrid systems allow the owner/operators to incentivize users to use forms of payment other than coins by rewarding them for using loyalty cards, credit cards, debit cards, or app payments,” says Lewis. “The full coinless stores utilize greater pricing flexibility and additional marketing capabilities that are not available to the coin-operated Laundromats.”

“Hybrids offer consumers with payment selections and operators with payment redundancy,” Bruner comments. “Dollar token/quarter coin hybrids significantly reduce overall coin handling while an all-token cashless format can eliminate all coins. Tokens are an owner’s private money system that works seamlessly with coins, cash and credit/debit cards, creating hybrid pay options so customers can wash and dry with whatever they carry in their pocket.”

In Tuesday’s conclusion: Questions to ask before making a system switch, and peering into the future