CHICAGO — For many years, the self-service laundry industry has operated on the simple premise that a customer can wash or dry their clothes by placing a predetermined number of coins into a mechanism connected to a washer or dryer and insert them into the machine.
Yes, payment by coin continues to be the preferred method used in Laundromats today, but the times are—pardon the pun—a changin’. The share of cashless stores—“coinless” is probably a more apt description—is growing larger year by year, it seems.
Depending on the payment system, 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 the vended washers/dryers in that particular store, or can use a credit, debit or EBT (electronic benefit transfer) card to start a machine. Some systems enable stores to accept coin, credit card, store or loyalty card, or a combination.
And gaining traction in the industry are app-based payment platforms that allow customers to pay for laundry services using their mobile devices.
Store owners seem to be taking notice of the expanded payment choices, but will there come a time when cashless finally overtakes coins as the preferred payment method used in Laundromats?
Let’s hear what some experts have to say about today’s payment trends and where they see things going as consumer preference and equipment technology evolve.
WHAT TO PONDER IF CONSIDERING A SWITCH
So what are some basic questions you should ask if considering switching to a different payment method, whatever it may be?
“This is probably the most important issue needing answers,” says Dave Richards, vice president for CryptoPay, which offers a credit card payment system for laundries. “Answers can be found in customer demographics, feedback, business analysis, all leading to a plan to implement. Who are your customers in terms of income, age, education, etc.? For example, your Laundromat is located near a university. You can assume most if not all students are tech-smart and probably already use some form of cashless payment. Remaining a cash-only operation is probably losing customers and is certainly not attracting new customers.”
“Technology is about user experience, first and foremost,” says Washlava’s Jamie Sewell, chief revenue officer. “It should provide competitive advantage to the operator investing in and deploying it. To do so, it needs to offer convenience and/or value to users. Consumers today are inundated with too many choices. Businesses who simplify and streamline the customer experience are rewarded with intense loyalty and new customer referrals.”
“Laundry owners are very progressive-minded and know their business and market,” says Imonex President Butch Bruner. “Each and every system offers different features and limitations. Operators should write down what they hope to achieve, explore each system’s capabilities, and then pick the best one for them.”
“There are more choices today than ever when it comes to alternate payment systems,” Card Concepts Inc. (CCI) President Steve Marcionetti says. “Before considering a solution, I think it’s important that investors and owners look closely (at) what they hope to accomplish with an alternate system.”
“The basic question each operator must ask is, ‘What is the total cost of ownership of this system over a period of five years?’” says Paresh Patel, Ph.D., founder and CEO of PayRange. “This should include the hardware costs, the activation fees, monthly fees, transaction fees based on estimated volume, service call fees to repair broken equipment, vandalism expense, annual fees, and whatever else. Companies may offer different programs that make direct comparisons difficult if one does not compute the total cost of ownership.”
“Will the payment system allow me to take customers away from competition (or prevent loss of customers to them)?” Laundroworks’ Oleg Stepanov asks rhetorically. “What are the other benefits of the system beyond just payments? Many payment systems are much more than just payment systems—they are actually also management systems.”
PREDICTING THE FUTURE
Trends show that cashless payment acceptance is growing, both among consumers and self-service laundry owners, but the experts differ in how long they believe the industry will more fully shift away from payment by coin—and how such a shift might occur.
“There’s definitely an upward trend in credit card and mobile use,” offers Stepanov. “It’s important to give customers payment options. The industry is still decade(s) away from the point where a store can be fully coinless and cashless. A store needs to be able to accept coins or card (which is reloadable by cash).”
“I think the continuing trend and growth of hybrid stores is going to continue and be the leader, only because the highest percentage of stores are either unattended or only partly attended,” says ESD Inc. Sales Manager Wayne Lewis. “Those owners, because of that, want to provide multiple payment options and not just restrict the users to one without someone being there to walk a new user through it.”
Washlava’s Sewell is confident there will be a “material shift” in payment trends in the next five years.
“At Excellence in Laundry two years ago, the keynote speaker told the audience that they should get ready to drop ‘Coin’ from the CLA’s name,” she says. “A paradigm shift is coming in this industry, from analog to digital, from manual to remote. This trend will bring new investors into the industry, unafraid of and experienced with new technology. … Cashless payments through mobile apps will certainly be part of this shift, but it’s about more than just payments. What customers experience in Laundromats is going to get a significant upgrade.”