September 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. 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 2
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. 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 cards and 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. - 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. 3
- 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 4
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 Coin Bill System Provider Contactless debit/credit terminal Card or device MDB/ICP Interface Protocol- EVA Standards Committee EVA Cashless Vending Specification - EVA Cashless Committee 5