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How to Use Card Readers For Vending Machines

Adding credit card readers to your vending machine is the biggest growth hack in vending. Learn how credit card readers work on vending machines!


The latest data shows that about 25 percent of the United States’ vending machines accept credit cards and cashless payments — including Apple Pay, Cash App, etc.

Have you ever thought about including a vending machine credit card reader? Are you curious about how these devices work or the benefits they offer to your vending machine sales?

If so, you’re in the right place. This guide answers all your most pressing questions about how to use card reader for vending machine.

How do vending machines read cards?

Not too long ago, the idea of a vending machine that reads credit cards seemed utterly impossible. We thought coin-operated vending machines are going to rule forever. Not only is it not impossible, but it’s also more straightforward than you might have initially thought.

Card reader vending machine operates as follows:

Payment is presented

The first step to reading cards and accepting cashless payments is swiping, inserting, or tapping a card. Older credit card readers may only feature options to swipe or insert the card. However, newer models include proximity readers that allow the consumer to simply tap their card and speed up their transaction.

Information is transmitted

Once the consumer swipes, inserts, or taps their card, their information will be transmitted out of the machine via a cellular modem.

You’ll need a Wide Area Network (or WAN) connection to transmit encrypted card data from your machine. This type of connection works with a SIM card, similar to most cellular phones. 

Some operators also choose to group multiple vending machines with a Local Area Network (or LAN). This technology can be helpful in areas with weak signals to help you connect to WAN units. It’s also more affordable.

Data leaves the vending site

When the data is transmitted through the WAN connection, it reaches a payment gateway. The payment gateway includes a data processing center that receives encrypted data and sends it to a credit card processor so it can be approved.

Some gateways also collect other data, such as sales information, details about service issues, etc.

Transaction is cleared

Once the credit card processor approves and clears the transaction, the payment gateway sends a signal back to the vending machine. This signal tells the device to accept or deny the transaction.

When the payment is complete, the sale appears on the consumer’s credit card statement, and the exact price will be charged to their card.

It’s important to note that, in some cases, an interim charge (that’s much larger than the vend transaction) may be posted to the consumer’s credit card statement. This higher charge acts as a placeholder until the final settlement occurs (usually within 24-48 hours).

Why should you use a credit card reader for vending machines?

nayax card reader
© Nayax

Upgrading to vending machines with credit card readers, and even to machines that accept EBT cards, offers you and your vending business many benefits. If you’re unsure about smart vending machines or even about upgrading, here are some of the most significant perks to consider:

Easier data tracking

Adding a credit card reader to your vending machine that can read Apple Pay as well, provides more accurate vending machine sales reporting data and inventory management.

When combined with a vending management system (or VMS), you can use the reader to collect valuable information for your business. For example, these details may help you understand consumer trends, decide which products to stock, and make strategic decisions that generate more revenue from your machines.

Increased profits

Some research shows that vending machines with credit card readers outperform cash-only machines and generate more profits. Another lucrative gap that my need filling are EBT-capable vending machines.

For example, a study from the University of Michigan showed a 26 percent increase in total transactions from vending machines with credit card acceptors and a 7 percent growth in spending with each transaction. And we all want bigger profit margins, right? (Read the full piece on vending machine statistics in 2023)

Smaller operators (those with under $2,000 per year in sales) also saw an average spike in sales growth of 110 percent and 18 months of having card readers on their machines!

Save time

When you invest in a vending machine credit card reader, revenue gets sent straight to your bank account. As a result, you reduce the amount of time you and your team have to spend counting cash. You’re also less likely to make costly counting errors.

Reduce losses

One of the most commonly cited reasons for vending machine vandalism is to steal cash.

When you install a credit card reader on your machines, you reduce the amount of cash stored in them. As a result, if your vending machine does get vandalized, there will be less money inside for someone to steal.

People may also be less likely to target your machines - especially outdoor machines - since they know they will contain less cash. If you have a built-in security camera on top of that, you're pretty much good to go in most locations.

How much does a vending credit card reader cost?

The cost of vending machine credit card readers is based on a few different factors, including the following:

  • Monthly fee (around $7.95, charged per month and per device)
  • Transaction fees (around 5.95% of purchases)
  • Activation fee (a one-time fee to start working with a particular service)

Depending on the number of vending machines you manage, you could easily spend hundreds of dollars per month on credit card readers. It’s likely worth the extra expenses, though, if accepting credit cards allows you to increase profits and serve a more extensive customer base. 

Nayax vs. Cantaloupe: Which vending credit card reader is better?

nayax vs. cantaloupe credit card readers

Most people in the industry agree that Nayax and Cantaloupe are the best card readers for vending machines.

Are you having a hard time choosing between these options? Here are some important pros and cons of each:

About Nayax Credit Card Reader

Nayax is a leading vending machine card reader with hundreds of thousands of units across the country. The brand started back in 2005 and has grown significantly since then.

Nayax pros

  • Secure and durable design
  • Accepts various payment options, including magnetic stripe cards, chip cards, contactless cards, and mobile wallets
  • Convenient mobile app with special marketing features for vendors
  • Wifi and cellular network options

Nayax cons

  • Some users may be frustrated by the $30 activation fee to start a Nayax account.

About Cantaloupe

Formerly known as USA Technologies, Cantaloupe was founded in 1992 and has a long history of providing high-quality products and services to customers in the U.S. and beyond.

Cantaloupe pros

  • Secure and durable design
  • Various design styles, including touch-screen options
  • Accepts swipe cards, chip cards, loyalty cards, Apple Pay, Google Wallet, and mobile app payments

Cantaloupe cons

  • No wifi connection option (cellular only)

How do you get paid by a credit card reader?

Vending machine credit card reader functions like any other credit card reader when it comes to delivering funds to your account.

First, the reader will extract information from a customer's card. Then, it will transmit that information to a payment processor. The processor collects details from the customer's bank. If there are funds available, the payment gets approved and processed (and you get paid). 

How to add a credit card reader to a vending machine

The process of adding a credit card reader to a vending machine is pretty straightforward. Even if you’re not much of a handyman (or woman), you can likely set up your reader by yourself.

The installation process involves the following steps:

  • Drill holes in the front of the machine (check the owner’s manual to get the proper drill bit size)
  • Use screws to mount the credit card reader on the vending machine
  • Place the receiver on the machine (it’s magnetic, so this is extra easy to do)
  • Plug in the credit card reader, bill acceptor, and network cable

Always turn the machine on (reset the machine) and test the credit card reader to ensure it works properly. It may take a few minutes before the device is ready to accept card payments, so be patient.  

Can you add a credit card reader to an old machine?

Credit card readers can sometimes work on older, refurbished machines, but only if they have MDB capabilities. MDB stands for Multi Drop Bus. It allows vending machines to communicate with cashless payment systems using vending machine controllers.

If the machine has DEX (or Digital Exchange) capabilities, you can also track inventory and gain more insight into the machine’s performance.

Do vending machine card readers need internet?

an ethernet cable pluged into a vending machine

Vending machine credit card reader relies on cell phone technology (4G/LTE). Because they use cellular connections, you don’t necessarily need an internet connection for a credit card reader to function properly and offer fast payment processing.

However, depending on where your machine is located, it might help to connect the reader to wifi instead. This connection will strengthen the signal and ensures the reader works more consistently.

Start using credit card reader for vending machines today

Credit card reader is changing the game in the vending machine industry. If you’ve been on the fence about using them, get ahead of the competition and start adding them to your appliances.

Remember the information discussed above so you can choose the most suitable device, install it correctly, and see the best outcomes.

Do you need help finding locations for your new and improved vending machines? If so, Vending Locator can help.

We conduct comprehensive research to identify and secure the best sites, ensuring you maximize profits and achieve your business goals. Get in touch today to learn more or get started.

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