European Vending Association aisbl Rue Van Eyck, 44 – 1000 Brussels - Tel : +32 2 512 00 75 – Fax : +32 2 502 23 42 1 vending@vending-europe.eu – www.europe-vending.eu

October 2009

Vending Requirements in a contactless debit/credit payment solution About the EVA The European Vending Association (EVA) represents the vending industry in Europe. It

groups together 19 national vending associations (representing 20 EU Countries) and 58

companies. Member Companies are active in 3 main areas: manufacturing of machines,

parts and peripherals (e.g. payment systems), production and distribution of ingredients

(e.g. hot and cold drinks, snacks, and chocolate bars), as well as operation of the

machines.

Some figures about the industry represented by the EVA: about 3.77 million vending

machines, run by some 10.000 companies, mostly SMEs and a yearly turnover over worth

€13 billion in 2008 and employing 85 507 persons.

The EVA works in close co-operation with its US counterpart, NAMA. The EVA and NAMA

concomitantly share and develop the vending standards EVA-DTS (data transfer),

MDB/ICP (Multi Drop Bus/internal communication protocol) and EVA-CVS (cashless).

Background In this new era of contactless payment, the EVA’s Cashless Committee has monitored the

various payment solutions available in the US market and the introduction of similar

systems in Europe.

A contactless debit/credit offers a promising improvement to current bank card

solutions. That is, a new payment solution which would extend the existing chip contact

or magnetic stripe cards to contactless payment.

European Vending Association aisbl Rue Van Eyck, 44 – 1000 Brussels - Tel : +32 2 512 00 75 – Fax : +32 2 502 23 42 2 vending@vending-europe.eu – www.europe-vending.eu

For contactless payment, a simple “touch” of the device activates the payment

transaction. This seems to be an ideal payment solution for small amounts (defined as

less than 15€ by the banking industry) and offline transactions.

The Vending Industry has on numerous occasions met and discussed the implications of a

contactless payment in unattended points of sale, with credit card institutions

(MasterCard, Visa, AMEX, JCB). However, a number of technical and commercial

concerns still need to be resolved.

Today, the EVA’s release of the Cashless Vending Specification (CVS) version 1.3 brings

forward some differences as summarised below:

The purpose of the CVS specification is to give guidance to manufacturers and operators

on the design and implementation of cashless payment devices in the vending industry.

Table 1

Banking Industry World of Vending

Transaction charges Typically fixed (debit) and percentage charges (credit) typically for transactions >€15

Heavily cash based, typical transaction values <€2

Selection mode Selection First

First make selection(s), then pay

Credit First

First give credit to the vending machine, then make selection (determine payment amount)

The vending industry already uses its own vending standards, which are open and which

the EVA and NAMA jointly produce and maintain. The protocol for internal

communication between the VMC and its peripherals e.g. payment terminal, is the MDB-

ICP version 3.0. Any new communication technology, regardless of its purpose, must

comply with the existing standards.

European Vending Association aisbl Rue Van Eyck, 44 – 1000 Brussels - Tel : +32 2 512 00 75 – Fax : +32 2 502 23 42 3 vending@vending-europe.eu – www.europe-vending.eu

Vending requirements with a contactless debit/credit Payment The vending industry has considered the following points relevant to a successful

implementation of a cashless system :

- Credit First is the key. First give credit to the vending machine and then make a

selection which determines the payment amount. This is how consumers currently use

vending machines with cash. (ref table 1)

- Speed is crucial. Cashless Transactions should not take longer than cash

transactions. It is estimated that transactions taking greater than 4 seconds will not be

accepted by the consumer.

- Pricing: At current transaction cost, cashless will only have limited application

in vending. For mass adoption, transaction cost will have to go down substantially.

- Technology: The EVA supports the adoption of contactless schemes (such as

cards, NFC e.g. mobile phone enabled payments) and other systems as they are best

suited to the vending environment. Earlier technologies such as chip and pin may require

a receipt printer and a secure keypad, which inflates the hardware costs to an

unacceptable level.

- Horizontal compatibility: systems should operate to common standards so that

the experience for the consumer remains consistent with existing methods of making a

purchase.

- Feedback: there must be some form of communication between the machine

and the consumer to indicate that the transaction has been successful. Systems clearly

communicate what occurs if a vend fails and how the consumer may be

reimbursed.

European Vending Association aisbl Rue Van Eyck, 44 – 1000 Brussels - Tel : +32 2 512 00 75 – Fax : +32 2 502 23 42 4 vending@vending-europe.eu – www.europe-vending.eu

- Simplicity: The user interface should be user-friendly and easy to understand.

Ideally, the consumer should be able to avoid having to present their card for every

selection made.

- Certification: The vending industry requires a simple generic process for (bank)

certification of contactless payment devices in vending machines. The vending operator

cannot be made responsible for the technical integration of payment systems.

- Communication: The banking industry would prefer all machines to have online

capability. This could prove to be a significant barrier to the full adoption of

contactless payment systems.

The EVA welcomes participation from all parties involved and will be very interested in

participating in any forum that will address the contactless debit/credit applications in

vending, be it to describe the vending requirements in greater detail, or to give any

clarification on its existing standards.

Document history First draft: 10 December 2007 Second draft: 30 January 2008 Third draft: 28 May 2008 Fourth draft: 4 march 2009 Final version: 25 June 2009

European Vending Association aisbl Rue Van Eyck, 44 – 1000 Brussels - Tel : +32 2 512 00 75 – Fax : +32 2 502 23 42 5 vending@vending-europe.eu

ANNEX I

A visual aid to the EVA's scope of work

In contactless debit/credit applications in vending

Outline of a Vending Machine

Vending machine

controller

Bill

EVA Cashless Vending Specification - EVA Cashless Committee

Card or device

System Provider

MDB/ICP Interface Protocol- EVA Standards Committee

Contactless debit/credit terminal

Coin

– www.europe-vending.eu