• Share

Tapping into Taste: Pay With Your Phone at the Vending Machine

By:  Jay Moye Jan 17, 2013
Tags & Topics:
Isis mobile vending

Is this the year you'll start using your cellphone to pay for everything?

Well, probably not everything. But technology tastemakers are hinting that 2013 could be the year of the mobile wallet, as consumers get more comfortable and confident using their smartphones to make on-the-go purchases.

On The Verge

While people have used their smartphones to shop online for several years, “tap and pay” transactions are just now catching on. Mobile payments hit $172 billion in 2012 globally, a 62 percent increase over the prior year.

“Everyone is waiting for the inflection point,” says Doug Busk, director of Mobile Technologies and Strategies for Coca-Cola. “It feels like it did in 1998, when people were easing their way into using a credit card to shop online. Now, airline passengers are pulling up itineraries and boarding passes on their smartphones, people are browsing and buying on their tablets, and mobile banking and cloud-based payment solutions are gaining popularity.”

The point of sale is next, which is good news for merchants, consumers and, according to Busk, Coca-Cola. Through a partnership with the Isis joint venture created by AT&T Mobility, T-Mobile USA and Verizon Wireless, Coca-Cola is piloting vending machines that let consumers buy drinks and rack up My Coke Rewards loyalty points with the simple tap of their phone.

Cashless = Priceless

Smartphone users can download the Isis Mobile Wallet app and securely add debit, credit and loyalty cards, coupons, tickets and more, which they can use to pay for purchases at participating stores — and vending machines.

In Austin, Texas, Coca-Cola is testing 200 machines outfitted with small screens and contactless readers that accept Isis mobile payments. The company plans to roll out tens of thousands of the units nationwide later this year.

A My Coke Rewards membership with 30 points comes preloaded in the Isis Mobile Wallet. Consumers can enjoy their first beverage — and every 10th drink after that — for free, while racking up points that can eventually be redeemed online for merchandise and special offers.

“We’re going beyond payment into loyalty,” explains Busk, who showcased the Isis-enabled vending machines during an AT&T developer conference this month at the Consumer Electronics Show in Las Vegas. “This technology removes the friction of having to open a bottle of Coke, look under the cap to find a code, sign up for My Coke Rewards and log points online. And any time you remove friction, you see increases in frequency.”

Dan Avenick, director Foodservice and On-Premise Strategy and Development, Coca-Cola Refreshments, adds, “When we think about the value mobile payment solutions provide for our consumers, it actually isn’t really about the payment itself. The advantage is really around the marketing programs mobile enables, including loyalty and couponing, which we can now deliver through the mobile wallet. That’s the true magic of mobile ... and why we’re investing so heavily in it.” 

Putting Muscle into Mobile

Isis is one of several mobile commerce technologies Coca-Cola is testing. A Google Wallet pilot is underway in five major U.S. cities, and SMS-enabled machines in Norway, Sweden, Finland and Great Britain include text message-based payment functionality, which adds drink purchases to a subscriber’s wireless bill.

Google Wallet mobile commerce technology

Coca-Cola is testing several mobile commerce technologies, including Google Wallet.

“This is a unique opportunity for us to take two steps at once,” Avenick says. “We’re aggressively deploying flexible payment devices across our U.S. vending fleet to accept credit and debit cards and put us in the lead by accepting a number of mobile payment solutions.”      

Coca-Cola is also working with stores and restaurants to help them use mobile payment options to help them connect with customers and cut costs.

"We’re serious about mobile innovation,” says Tom Daly, Coke’s group director, Global Connections. "Mobile is the closest you can get to the consumer, so that four-inch-by-two-inch screen is critically important for us. We want to use a phone in one hand to put a Coke in the other.”