Vending Credit Card Readers 101

Not everyone carry’s cash anymore. A great way to drive more sales and get more customers is to add credit card readers to your vending machines. There are four major companies that provide credit card services for vending machines. Below is a breakdown of the way the service works and details about each brand and their costs.

An Overview

First you need to pick a brand card reader system. (Look below to see the brands and information about them). Find a company that offers the features and functionality that is important to you and fits your goals best. When setting up an account they will setup merchant account for you to receive the revenue generated by your credit card readers. It is ideal that you have an business entity formed already (LLC or Sole Prop), and EIN and a business bank account setup before opening an account with a credit card service provider. 

Each credit card reader costs roughly $350 each. This is a one time cost. This will include the reader, an antenna and the cables required to plug it into your machine. These readers operate on cellular signal; so order the version that works best in your area (in the US it’s typically AT&T or Verizon). If you need to place a machine somewhere where cellular signal is not available, there are work arounds available.

cMonthly costs can range depending on the provider you choose (see below). The typical monthly cost ranges between $7-15 a month. This covers the cellular service to the reader, the terminal communication costs, and online reporting tools. 

Lastly, you have transactional fees. If you are familiar with how being a credit card merchant works, some of this may be familiar. A standard brick and mortar shop that accepts your credit card payment will pay anywhere from 1-4% plus a transaction fee of 10-30 cents. This is where vending credit cards operates much differently. The providers instead charge a flat 5.95% of your credit card transactions. 

Here’s an example of a $2 transaction using the traditional method: $2 product – 2% fee (4 cents) + 30c transaction fee = $1.66 after credit card fees.

Here’s an example using the common vending transaction method: $2 product – 5.95% fee (11.9 cents) = $1.88 after credit card fees.

As you can see with the flat percentage method, you keep much more money than you would using the traditional credit card processing costs.

One way you can offset this cost is my instituting a set transaction fee for credit card transactions. This is fee is most commonly 10 cents. It would offset all or most of your credit card processing fees and allow you to keep more profit. One important thing to keep in mind if you do put this fee process in place. You are required to put signage on the machine stating this. Otherwise, it will lead to chargebacks and/or very unhappy customers that they were charged more than they were expecting to pay for the item.

Installation of the card readers is typically a pretty easy process and can be done in about 30-45 minutes with the right tools. Make sure to power down your machine before unhooking anything inside the machine.

Credit Card Reader Providers

365 Markets / AirVend

Headquarters: Detroit, Michigan

Monthly Cost: $7-15

Transaction Fee: 5.95%


Canteloupe (Formerly USA Tech)

Headquarters: Malvern, PA

Monthly Cost: $7.95

Transaction Fee: 5.95%



Headquarters: Malvern, PA

Monthly Cost: $7-10

Transaction Fee: 5.95%



Headquarters: Israel and Hunt Valley, MD

Monthly Cost: $7-10

Transaction Fee: 5.95%


How to Pitch your Services to a Business

Ok. First, make up some marketing materials. A flier about your business and what your offerings are. Then make up a list of products that you plan to sell. Have a sample blank contract ready to go.

Then start looking through your area on google or visit your chamber of commerce to get a list of businesses and their size. Start calling them or visiting them. Target businesses that have at least 15 employees. Best to start with 10-30 employees. Not too big, but enough to move product. High traffic locations with less employees is ok.

Ask to speak with the manager, site supervisor, HR manager, etc (someone in charge). Ask if they have vending today, if they do ask if they are doing well, stocked with product they like, priced fairly, or accept credit card.

If they say no to any of those, offer to fix that for them by taking over their services. Setup a time to see their setup or space. (Or if you’re already there) look at the space. Pay attention to door widths, and what they have now. 

Make sure to rightsize the machine to the location. A combo is good for 10-30 employees.

Then ask them to fill out the contract and select their favorite snacks from your list.

Then coordinate install and servicing!

Great places to pitch to are:

  • Auto Shops
  • Large Dance Studios
  • Warehouses
  • Logistics Companies
  • Large Industrial Companies
  • Dealerships
  • Apartment Complexes
  • Hotels
  • Motels
  • Airports
  • Manufacturing

How to Get Started in Vending

Before you start the business formally, do research in your market first.

1. Are there any other vending companies in your region?

2. If so how many are there?

3. Call businesses, are they doing a good job of keeping their locations and customers happy?

4. Find out if there are any businesses in the area that have 20+ employees that don’t already have vending services.

5. If you find that there is an appetite for growth in this market from answering the above questions move on to #6. If not, stop and look into another business.

6. Figure out what your startup requirements are. (Capital financial investment, time investment and space requirements)

6a. Find a mentor or coach. Don’t have one? DM me or others on here.

7. Do you have the ability to meet those needs without stressing your current personal financial requirements and space to operate the business? 

7a. Keep in mind that the typical minimum investment is going to be at least $1k, but is usually closer to $3-5k. Can you afford it? If not, stop here.

8. Reach back out to those businesses that you called to see if they would be willing to switch over to you, or get a vending machine. Get them to commit with a basic contract. Rightsize the equipment for that business (more on that below), and get equipment ordered or bought. 

9. Establish you business with the state/county. Get bank accounts setup and locate wholesale food and drink providers. Get accounts setup.

10. Figure out where you are going to operate the business from. Home? Storage unit? Commercial warehouse space? 

11. Take delivery of your machines, and coordinate installation at the customer site. (This may require hiring movers or buying moving equipment)

11a. Go pickup the snacks snd drinks that your customer requested and some other top sellers to fill in the machine(s).

12. Install and stock the machines.

13. Come back and refill them regularly.

Rightsizing equipment is the key. If you put in too small of equipment you’ll be out there too often to refill. If you put in too big equipment then the product will go bad before all products cycle through the machine. The goal would be to use a combo for 10-20 employees, small full-size equipment for 20-35 and full size wide machines for 40+ employees. 50+ employees consider doing a micro market instead.

Realize that this is not typically a get rich quick or way to make a quick return on investment. It can take a year or two to get your capital back in some cases. The key is long term steady income from each location that you maintain. It also requires regular time investment on your part. Vacations of more than a week can be tough without a support system in place. Be prepared for unexpected breakdowns and issues to come up. Have a contingency plan in place. 

Lastly, this is largely a customer service business. You need to keep the location (business) happy and their employees happy. If you put in old equipment that is constantly breaking down, they aren’t going to buy from you. Or if the machine regularly eats their money, the product is regularly going expired or they cant get a hold of you to get help or service their machines, its not going to end well.

Have a plan in place for these things. Write it out. Make a commitment to answer every call that comes in, and return missed calls promptly, regardless of how small of an issue they have. Doing that will win your customers over for life.

How to Take Over a New Location

Congratulations! You have a new vending location to service! There are several things you should do to ensure that things go smoothly. Here’s a guide of things to do and think about through the process.

Important steps with your new client:

  1. Most importantly, meet with the new location’s management. Introduce yourself, give them your business card or contact information. This way they know who to call when/if something goes wrong.
  2. Get the business owner to sign a new location agreement/contract right away. This is important as it lays out the rights and responsibilities of both parties. It also can explain the process by which any commission is paid.
    1. Dont already have a contract to use? No problem! use our contract generator tool here.
  3. Provide the location management a list of your standard snacks and drinks. Allow them to customize the machine further with the items they want as it will help drive more sales to your machines. Be transparent about your pricing on that sheet. It helps avoid issues down the road.
  4. Verify and document the business hours of the location and ask if there are specific times of the week or day that you should avoid coming to service the machine(s).


Important steps to take with the machines.

  1. Change the locks on the machines to match your master key. 
    1. Dont have your own set of matching locks? Buy several of the same key number through a vending parts distributor like
  2. Update the signage on the machine to show your business as the owner and your contact information on it.
  3. Update the pricing on any of the products if necessary.
  4. Make sure the coin mechanism is properly loaded full of change.
  5. Get an accurate inventory of the products in the machine(s) and log it in your vending management system.
    1. Dont know what a vending management system is? Its an online software that allows you to manage your vending machines and maximize their efficiency. This software is a huge cost saver and helps maintain order with your accounting and servicing of the machines.

How to Buy Machines(s) on Location

Oftentimes, you may find someone advertising their vending machine available for sale “on location.” This can be an easy and exciting way to get started in the vending business as it’s a turn-key approach to get started.

There are several things to keep in mind when buying a machine on location.

  1. Find out why they are selling the location. 
  2. Get their asking price for the whole package.
  3. Go visit the machines. Take pictures of them, the model numbers (you’ll need this later) and take note of the business it’s located in.
  4. Ask the seller if they have a location agreement in place with the business. If they do, ask for a copy of it. 
  5. Ask the seller if there is commission paid to the business involved, and what the terms are. This should be outlined in the agreement/contract if there is one.
  6. if any of the machines are branded to Coca-Cola, Pepsi, or Dr. Pepper, check the inside and outside for asset tags that might show the machine is owned by the bottler. If it is, DO NOT factor that machine(s) value into the machine value portion of the equation below. It would be considered owned by the bottler and not the seller. (Coke or Pepsi most commonly)
    1. If you go forward with the sale, you will need to open up an account with that beverage distributor and have them transfer that machine to your account. If yo do not transfer it, the bottler may come and pick up the machine without notifying you and take all the product and money inside, leaving you with no recourse. This process is usually not a headache to complete and can be done in a week or two.
  7. Ask the seller to provide sales revenue records for the last 12 months (more if they have it) for the machine(s).
    1. If they have credit card readers attached, ask to see the sales reports generated by the credit card reader system as it will track cash and credit card sales and is the most trustworthy source of revenue data.
  8. Research what the machine(s) are worth by searching their make and model numbers on Facebook marketplace, ebay, craigslist, or even call distributors to ask what they are worth.
  9. Now take down all of this information into one spot to do some calculations.
    1. If there is a vending agreement or contract in place, use the following method to calculate the total estimated value of the location
    2. Method to use: 50% of the gross annual sales + the market value of the machine(s)
    3. For example, a auto dealership has two machines that are making $10,000 a year and were worth $3000 total. So this would make the location worth $8,000 (50% of $10,000 + $3,000 machine value)
    4. If the seller does not have a location agreement in place, then you would reduce the location’s value significantly as the location could kick you out after taking over and you would be left paying a premium for a location that wants you out and you would no longer be making money, and have to move the machines at your own expense.
    5. In these cases, we value the location based on 15-25% of the annual sales. For our example above, the dealership would only be worth $1,500-$2,500 instead of $5,000. 

  10. Now compare your calculated number from step 8 above and compare it to the number they are asking. Are they the same, or close? if not, try to negotiate.
    1. If the locations are not currently under contract but would be willing to go under contract, that may help with negotiating values.
  11. If you go forward with the purchase of the machine(s) on location, work out the process to start the transfer of the credit card readers to your name as soon as possible. It can take up to a month for this process to occur sometimes. Without the seller’s help in transferring the credit card readers to you, they are useless and cannot be used again. The credit card servicing company will not transfer readers to you without approval from the previous owner.

Did you decide to buy the location? If so, go to our next article on the steps to take to properly take over a location to operate as your own. CLICK HERE.

Still have questions, or want help to get through the sale? Contact me here and lets talk about it!

Decide on a niche

Step 1: What kind of products do you want to sell or what service do you want to provide?

This will be the most significant decision will be made as part of this journey. This is a decision that can be changed as you progress through this, but this decision will be the keystone to all of your future work.

Step 2: Research who is providing these services or products to other in your area

Look around in the area for this service, ask business owners, friends and community leaders if a new provider of this service and/or products would be beneficial to consumers in the area. Often businesses can be underserved or receiving services at too high of a price. Knowing what services are available and their price points is important.

Step 3: What’s wholesale cost for the product or service that would be provided?

If you are going to sell products, Google vendors that sell the items that you want to sell. For example, if you want to sell snacks, candy and drinks common vendors would be Sam’s Club, Costco, BJ’s or even your local grocery store. Are the products something that can be bought through another wholesaler? What kind of quantities would need to be purchased to get products at the lowest price?

Step 4: What pricing would the products be sold for?

Continuing on the sale of products track, what would be a good price that these products could be sold at? This research can be done by visiting businesses that are selling your products today. For example, if you are selling drinks and snacks, visit a dealership or hotel to see what their pricing is.

Step 5: Compare the difference between wholesale and the average retail price.

Is there a solid margin between the numbers you found on step 3 and 4. The ideal margin on products would be at least 50-100% more than your wholesale cost. If you would be providing a service, would you still be able to cover cost and your time with the profit made? If the answer is yes, then you are on the right track to get a good business going.

So you want to start a vending business

In order to start a vending business, You need to complete a series of steps to best position you to start off on the right foot.

Before starting a vending business it is important that you thoroughly research the industry, complete some local market research, and check with your state’s licensing, taxation and other legal formalities that need to be complied with. It’s also very important that you have good financial backing as your start-up costs can often outweigh your revenue until you have machines placed and making money.

The first thing you want to do is decide what kind of products you are going to sell. You can do almost anything with a vending machine, There are numerous kinds of vending machines to consider. Determining what you want to sell, and the amount of money you have to invest can drastically swing what type of vending services you want to have.

What kinds of vending services are there?

There’s way more to it than the most common kinds of selling beverages and snacks in a machine. Vending can encompass arcade style claw machines, cash ATM’s, bitcoin ATM’s, ICE machines, office coffee service, bottled water, specialty products, to micro markets and much more.

Is there still room to grow in my area?

This is probably the most important question to ask when considering a business like this. Research how many companies are doing what you want to do in the area. Call area businesses that would be candidates for your services. Do they have service already? Are they happy with them? This research is important to know if the market is saturated and how difficult it could be to set up shop in that area.