Civic Inks Deal to Bring Blockchain ID to 1,000 Vending Machines

After demoing a beer vending machine at SXSW, Civic is announcing a blockchain identity deal with 12 suppliers in the automated retail space.

AccessTimeIconApr 23, 2019 at 10:00 a.m. UTC
Updated Sep 13, 2021 at 9:05 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

It started with selling beer, but age verification could crack open a whole industry to cryptocurrency.

CoinDesk previously reported on the demonstration of Civic's beer-selling machinery at this year's South by Southwest (SXSW). Now the company is announcing partnerships with 12 major automated retail companies – AAEON, AR Systems, Fastcorp Vending, Global Vending Group, greenbox Robotics, Invenda, IVM, IVS, Retail Automated Concepts, SandenVendo, The-Venders and Wemp – to bring similar technology to the masses.

"Vending machines represent an introduction to the mass market, where people can see how digital identity functions in the real world, as well as opening up an entirely new market for automated retail," CEO Vinny Lingham said in a statement.

The 12 partners control more than a million internet-connected vending machines, according to Civic. The identity startup expects the technology to be used in 1,000 machines by the end of 2019.

For users, verification will rely on document scans (of a driver's license, in most cases) to confirm age and identity as the rollout takes place. Civic's demo at SXSW had previously used "knowledge-based authentication," that is, a series of questions only one person would be likely to correctly answer. This form will continue to be an option for vendors who prefer it, according to a spokesperson.

Stablecoin solution

Lingham told CoinDesk the company expects to use Gemini's GUSD in the Civic Pay app (and perhaps others, later).

Stablecoins don't have the volatility of other cryptocurrencies (such as Civic's own CVC token), so when customers buy something through the Civic Pay app, they will most likely use GUSD (purchased through Civic) to pay for it. Participating merchants will receive the stablecoin and a much lower transaction fee.

"For non-age-gated products, the vending machine industry is dying for a cheaper, faster transaction," Lingham told CoinDesk. "They can save 80–90 percent on transaction fees."

For its part, Civic may still pay credit card fees but it faces a lower chargeback risk because the app has already verified the identity of the user.

"Our risks are substantially lower than a vendor taking a credit card transaction," Lingham said.

Civic declined to disclose a timeline for stablecoin deployment on the app.

Beyond beer

Tobacco, alcohol and hemp-related products will establish Civic's beachhead in the automated retail sector, Lingham told CoinDesk.

Beyond that, the advantages of using Civic Pay to dodge transaction fees could push the app into other categories. However, Lingham also highlighted another area that the company hopes to move into: pharmaceuticals.

While not necessarily age-gated, there are a variety of products that many users need frequently (for example, asthma medication, insulin or prescription antihistamines) that require identity verification. Today, this is done by visiting a pharmacy counter, but Lingham says Civic is in talks to bring its technology to this vertical, though the timeline is much further out.

"This is where it's going. It's not there yet," Lingham said.

Civic will be demoing its application at the National Automated Merchandising Association's NAMA Show in Las Vegas from April 24–26.

"The vending machine market is flourishing and being the first to adopt industry-changing technology is critical to providing the best user experience,” Mike Weiser, SandenVendo’s CEO and president, said in a statement. According to the company, it controls over 800,000 machines.

UPDATE (April 23, 11:25 UTC): This article has been updated to state that Civic has signed deals with 12 companies, not six, after new information was received from the firm.

Vinny Lingham image via CoinDesk archives

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.