The new program provides free products based on points earned by smartphone users who pay at participating vending machines with the Isis Mobile Wallet. The loyalty play is an expansion of a pilot program introduced last fall with USA Technologies at vending machines in Salt Lake City, UT, and Austin, TX.

“Loyalty in this industry is new  – and it’s good for everyone: The consumer, the business owner – through new revenue and consumer engagement opportunities – brand names that now have another channel to market through, payments industry – including USAT, as demand for cashless continues to grow,” said Veronica Rosa, vice president of corporate communications at USA Technologies, Malvern, PA.

“USAT’s new loyalty promotion with Isis, USAT’s loyalty and prepaid program, and our mobile apps that help consumers find machines all work off the cashless platform and help to engage the consumer for the first time ever in this ‘traditionally cash-only’ market sector,” she said.

Driving repeat purchases
Reactions to the pilot were positive, with USAT’s customers – vending machine operators – reporting that the integration with Isis provides new opportunities to improve their business results, per Ms. Rosa.

Right now, anyone with a phone with the Isis mobile wallet on it could walk up to any of USA Technologies’ NFC-enabled vending machines nationwide and pay with their mobile phone. The linkage to a loyalty account is currently being rolled out to USA Technologies installed base of over 100,000 contactless payment terminals with Isis’ SmartTap mobile commerce technology for rewards acceptance and redemption.

When users make their fifth vending purchase, it will be free for them, with USAT and Isis reimbursing the vending operator for the purchase.

The Isis Mobile Wallet launched on Oct. 22 in Salt Lake City and Austin. The joint venture between AT&T, Verizon Wireless and T-Mobile USA uses NFC technology embedded in some smartphones to enable contactless payments at retailers such as 7-Eleven, Foot Locker, McDonald’s, Macy’s, The Home Depot and Jamba Juice.

NFC-enabled commerce
While NFC-enabled payments hold the promise of simplifying shopping by enabling users to pay for purchases by tapping their phone on wireless point-of-sale terminals, adoption has been slow because there are a limited number of NFC-enabled handsets in the market and many retailers still do not have the required contactless payment terminals installed.

Google Wallet is the other main competitor using NFC technology in a mobile wallet.

Consumers who download the Isis Mobile Wallet app on a handset that works with NFC are able to open the app at a participating retailer or vending machine, enter their PIN and tap their phone at the POS terminal to pay.

“These business owners have never had any kind of connection to the consumer,” Ms. Rosa said. “A cashless platform is the foundation — and that foundation now allows for additional programs that offer immeasurable opportunities to drive new revenues, new customers, new relationships with the brand names they carry, etc.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York