Dive Brief:

• Cantaloupe, a software and payments company that provides devices for vending machines and other self-pay equipment, is partnering with digital asset exchange Bakkt Holdings to accept cryptocurrencies and Bakkt loyalty points, the companies said in a May 6 press release. Atlanta-based Bakkt is a unit of New York Stock Exchange parent, Intercontinental Exchange.
• The two companies aim to cash in on trends toward cashless and cryptocurrency payments that allow consumers to use digital wallets at Cantaloupe-enabled machines.
• The U.S. vending machine market is expected to grow by 2.8% this year to about $7 billion dollars in 2021, according to research firm IBISWorld. Cryptocurrency use could boost Cantaloupe revenue, according to a research report on Cantaloupe from analysts at financial services firm William Blair.

Dive Insight:

Vending machines may soon offer new ways to pay for chips, drinks, or even golf balls.

Cantaloupe, which provides devices that enable autonomous retail, announced the partnership with Bakkt that will allow customers to purchase items with Bitcoin and other digital assets at Cantaloupe-affiliated vending machines, automated kiosks, or other self-service sites. Cantaloupe's devices let the equipment accept payments other than cash for everything from candy bars in an airport vending machine, to vacuum cleaning services at a car wash, to golf balls at a driving range (though some allow cash too).

The partnership comes during a push for such retail stations to become more cashless, and as companies look to profit from tapping consumers' unused digital assets. To this end, they're allowing customers to pay with cryptocurrency instead of cash or traditional credit cards. 

"It's often overlooked how much untapped digital assets are waiting for consumers to uncover, redeem and spend," Bakkt CEO Gavin Michael said in the press release. 

The tie to Bakkt comes on the heels of another new Cantaloupe partnership with Castles Technology, which makes credit-card payment terminals. Together, they plan to create a "next-generation" cashless operation at the unattended retail outlets, they said in a May 4 press release.

"We believe the benefits of Cantaloupe's platform are vastly increased with Castles' products," Cantaloupe CEO Sean Feeney said in the press release.

Currently, about 65% of payments processed by Cantaloupe devices and software are through credit and debit cards, with most of the remainder in cash, according to the company. 

Cantaloupe management is driving increased revenue by way of the added cryptocurrency features as well as planned international expansion, among other efforts, according to the May 7 William Blair report on Cantaloupe. 

Consumers can already pay using their phones at some of the Cantaloupe-enabled machines, using links to Google Pay and Apple Pay. "Ultimately, we are all going to move to most of our payment being in our phone," Cantaloupe CEO Sean Feeney said in a recent interview.

Cryptocurrency has taken center stage this year, with backing from corporate titans like Tesla CEO Elon Musk. Still, he pulled back on his past endorsements of cryptocurrencies in recent days, encouraging people to "invest with caution!"

Cantaloupe was founded in 1992, originally as USA Technologies, Inc. It rebranded to Cantaloupe in April, and has more than one million devices placed across its network. Company headquarters are located in Malvern, Pa., and the majority of its 18,000 clients are located in the United States.

The company reported $163.2 million in revenue for its last fiscal year that ended June 30, 2020, according to a filing with the Securities and Exchange Commission. The company earns revenue from equipment sales as well as license and transaction fees.

In addition to servicing the devices that allow their machines to accept payments, Cantaloupe provides its clients with data it collects from customer use of the machines.