Small businesses face a double whammy as overhead gets more expensive while potential workers have more options in the gig economy. Payment firms offer one compromise: checkout without cashiers.
"These are unprecedented times for the hospitality and retail industries," said Jegil Dugger, the founder of Pye, a nine-year-old digital payment company that sells autonomous retail technology, mostly for small businesses. "You're looking at labor shortages with the way jobs are shifting away from traditional retail, and these stores have larger bills to run their business."
Autonomous retail firms like Pye, Nayax and Cantaloupe are expanding as technology firms in other industries retrench. The companies are betting on demand from merchants that are looking to cut costs by using a stopgap payment technology that doesn't require staff while waiting for Amazon Go-style alternatives — where the store is built from the ground up to track and automatically charge purchases.
Pye, which has recruited its own network of merchants across the U.S., this week signed its first bank distribution deal. JPMorgan Chase will process payments for Pye in Canada, a deal that will cover about 5,000 self-serve kiosks with deployment scheduled to start immediately and to be completed over the next year. Pye and JPMorgan will release a separate plan for deployment in the U.S. over the next three to six months.
JPMorgan, which processes more than $9 trillion in transactions each day, has been expanding its
Dugger, a
"We think there is going to be demand for payment automation based on what's happening in the economy," Dugger said, adding Pye hopes to forge other bank partnerships and distribution deals. "This is a good fit for banks given their role as a merchant acquirer."
Other self-checkout firms see a similar path forward in a tough economy. Nayax, which develops autonomous retail technology, in late September began trading on the Nasdaq and Tel Aviv Stock Exchange.
The company plans to use funding from the listing to expand to larger merchants, and a greater range of retail environments. The company is looking beyond traditional categories for unattended retail such as car washes and food vending, according to Carly Furman, CEO of Nayax North America. Nayax recently partnered with American Express to aid distribution of Nayax's cashless unattended point of sale terminals. Amex estimates autonomous or unattended retail is on pace to be a $46 billion yearly market by 2027.
Furman anticipates more merchants will be
"A recessionary environment lends itself to an acceleration toward taking payments without requiring a checkout station," Furman said. Like Pye, Nayax is looking at small businesses and micro merchants as potential landing spots for new deployments.
A third firm, Cantaloupe, (formerly USA Technologies), recently released Remote Price Change, a tool that allows operators to change prices remotely over an entire fleet of machines.
Cantaloupe is positioning the product as a way for merchants to counter inflation on gas and labor costs while updating self-service checkout stations.
Cantaloupe additionally released the results of a study it conducted with
In a release announcing the results of the Michigan State survey, Cantaloupe cited the growth of
But the Amazon Go model would be tough to replicate in existing stores, which would have to be retrofitted with the proper technology.
Duggar and Furman both said their firms are interested in checkout-free retail and consider their latest version of contactless payments for kiosks a step toward a payment system that uses elements of checkout-free retail.
"Self-serve is a necessary step on the way to checkout-free," said Daniel Keyes, an analyst at Javelin Strategy & Research. While self-serve does reduce labor costs, there's still a line and a dedicated checkout, he said.
"It shows there's more work to do," Keyes said.
