Numbering nearly 600,000 in Canada alone, the machines held the potential for lucrative business, but were burdened with a fundamental problem – using coins meant they were labor-intensive and required customers to have the correct amount of change.

President and CEO of cStar Technologies Stella Yoon says: “This is where we thought we could intervene and help turn around business for vendors by cutting down labor costs and replacing coins with payment via cards and mobiles.”

Yoon says other companies have tried to introduce cashless vending machines, but cStar’s solution is the most successful to date.

The company’s solution, Vending Genie, combines two functionalities – cashless vending and wireless management of data. With the help of a wireless Local Area Network (LAN), supply personnel are able to remotely assess each machine’s status.

“With our Vending Genie, they no longer have to climb stairs or take elevators to check on what a machine may have run out of,” Yoon says. “All they need to do is check on their handheld device, which is connected to our Genie, to find out what needs to be replenished, by how much, and when servicing machines which use coins, check whether there is a coin jam.

“With the earlier method, a driver or vending machine caretaker would take 10 hours a day to service 10 to 15 machines. With our Genie, they are done by noon. That is a remarkable saving – both for the worker in terms of labor, and for the vending machine operators in terms of money and time.”

The Genie, introduced two years ago, is present in about 1000 machines across North America and Asia with plans for expansion to Europe.

Earlier attempts to provide cashless vending relied on wireless Wide Area Network (WAN). While having the advantage of covering a very large area, it did so at the cost of a monthly airtime fee charged by the cellular operator.

“We realized that the best way out of this was to come up with a wireless Local Area Network solution,” Yoon says. “With LAN, our proprietary technology helps you gain access to logistical information locally without needing to rely on cellular operators and their airtime charges.”

Unlike WAN, wireless LAN is able to penetrate both high-rise buildings and basements to obtain data from vending machines.

“The advantages are obvious: robust communication with no monthly fee,” Yoon says. “Powered by our technology, the vending machine worker receives all the information he needs in a handheld device, an industrial form of a PDA, and is able to service all the machines on his route in a timely and cost-effective way.”

Another aspect of the Vending Genie is its ability to free both vending machine operator and customer from the hassle of coins.

Currently installed in 100 machines in 30 hotels across Canada, the Vending Genie enables hotel guests to use their room key cards to buy soft drinks and snacks without using money.

Venecio Rebelo, general manager of the Ambassador Conference Resort in Kingston, Ontario, says: “Ever since installing the cashless Vending Genie, we have seen profit margins go up by 67 percent in the first year of use and another 17 percent in the second year. And there have been no incidents of vandalism.

“I wish I could implement more technologies like this; it has had an immediate impact on my bottom line.”

Yoon says this is just the beginning.

“I see a future rich with possibilities in terms of enabling mobiles with payment functionality,” she says.

“At the moment, mobile operators are wary of allowing their accounts to be charged with the purchase of goods from vending machines. But when the new generation of phones – with a radio frequency identification chip inside – arrives, they will feel more secure about getting their money back. And then, paying by mobile will really take off.”

Rajya Sjunnesson Rao