As of the end of 2012 only 10% of total consumer spending was cash. For leisure out of home entertainment the spending pattern is difficult to calculate but we do know that the movie industry reports that up to 88% of ticket purchases are with debit/credit cards. With the trend heading toward cashless, the amusement game industry is still in last place. Credit card/debit card token dispensing machines have made some market penetration as have debit card systems for about 8%-10% of family entertainment centers. However, the cost of the hardware, software and Internet connections is still too high to make financial sense in locations that have a small number of games.
USA Technologies (USAT) now has a cashless e-port wireless payment system that is set up for the amusement games industry. Over the past 20 years, USAT has grown steadily to 186,000 units from 4,100 customers connected to their e-port network, targeting the ‘small ticket, unattended retail market’. The units are comprised of car washers, air machines, laundromat washers/dryers, vending retail self-serving kiosks, and approximately 400 amusement machines. With over 150,000,000 transactions annually, USAT makes sense for the amusement industry. USAT has been working with AMI Entertainment and Apple Industries for the past few years and has now entered into an exclusive national distributor agreement with Betson.
Here are the costs and what is included:
ePort Edge MSRP: $329.00 includes card reader w/embedded Verizon CDMA modem, isolated PULSE interface, standard gain antenna w/4’ cable, drilling template, mounting screws and optional mounting flange plate.
One-time Registration/Activation fee (per device): $30.00 charged to Customer by USAT, prior to turning credit/debit acceptance “ON”, this fee includes but is not limited to the registration and activation of the modem required to establish wireless communications, in addition to administrative setup for Customers to receive weekly EFT payments, Merchant ID assignment, and access to USALive web reporting.
Simplified single, blended-rate card processing fee: 2.50% + $0.10 for the settlement of each cashless transaction (Visa credit/debit/check card, MasterCard credit, American Express and Discover).
Monthly network data service fee (per device): $9.95 includes the cellular/wireless data transfer (Verizon), automatic deposits of NET card proceeds to Customer’s bank account (EFT), sales, accounting and reconciliation reporting (USALive back office) and the customer/billing support help desk.
The reader operates on 12 Volts DC so the installation is simple and can easily be done in the field. After mounting the reader to the front of the cabinet, tap into a 12 volt line from the game and attach unit to coin switch and/or bill acceptor outputs. The unit supports ‘pulse’ output with adjustable multiple pricing. There are no phone lines or internet services required. It operates like having an open cell phone line for 2-way communications.
If there is a bill changer in the location that dispenses tokens, only 1 reader would be needed and the bill changer would then accept debit and credit cards. This works perfectly as the reader has a scrolling button so the customer can choose, for example, to charge $2, $5, $10, or $20 worth of tokens as one transaction. Note that the example starts with $2 as the minimum charge as I believe that USAT is now using $2 as a minimum charge as operators don’t want to be charged 10 cents plus 2.5% for a 25 cent price per play or even 10 cents +2.5% for 50 cents per play.
The concept is to have people who have no coins and little cash play a game multiple times. USAT CEO Steven Herbert reports “Our customers experience an average 30% increase in cashless over cash.” So, let’s say that there is a Key Master in a location that is operated at $1/play on tokens, quarters, or bills and just this one game is now connected to the e-port network. The operator sets the game to accept credit/debit charges of $2, $5, $10, $20 providing bonus plays for $5, $10, and $20 charges, but only 2 plays for a $2 charge. The transaction fee on a $2 charge would be 5 cents + 10 cents = 15 cents (to be split with the location owner). The average prize cost at 30% would be 60 cents. The additional amount of revenue would be $1.25, assuming that this particular customer would not have played the game because it would be too much of an effort to find an ATM and withdraw enough cash to warrant those transaction fees. The way we operate now, chances are that we are missing out on 9 out of 10 particular customers.
The vending industry already has an installed base of USAT units of over 100,000 and is way ahead of the amusement industry. They now have enough enabled units to include loyalty programs that can directly market to a consumer through recognition of their smart phone. One of the new vending programs, called ‘Fifth Vend Free,’ allows customer to be eligible to receive free product(s) from other enabled USAT vending units. In my opinion, there may be opportunities in the near future for game players to earn rewards points that can be redeemed for products and services that are supported by USAT units with operators’ accounts being automatically debited and credited properly.
With all of this happening right in front of us, operators who have not yet been involved with cashless operations now have a great and inexpensive opportunity to try just one USAT unit on one of their token dispensing bill changers or one of their high end merchandise dispensing machines and not only see how easy it is, but see how much additional revenue is generated. For more information click on the Betson logo or go to www.betson.com or www.usatech.com.
