PROSPECTUS SUPPLEMENT No. 2
                        Filed Pursuant to Rule 424 (b)(3)
         (To Prospectus dated October 30, 2000 and Prospectus Supplement
                      No. 1 thereto dated March 14, 2001)
                           Registration No. 333-48938

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                             USA TECHNOLOGIES, INC.

                        6,700,000 shares of Common Stock

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         The following shall be added to Results of Operations of the
Management's Discussion and Analysis of Financial Condition and Results of
Operations section of the Prospectus:

                  On April 20, 2001 the Company sold 450,000 restricted shares
of its Common Stock to 9 accredited investors for $1.00 per share for an
aggregate of $450,000 pursuant to a private placement offering under the Act and
Regulation D promulgated thereunder. We have agreed to use our best efforts at
our cost and expense to register all of these shares for resale by the holder
thereof under the Act.

                  During March 2001, the Company extended for up to 60
additional days or until May 31, 2001, the period during which all outstanding
warrants and purchase rights could be exercised at $1.00, and extended the
expiration dates for up to 60 additional days or until May 31, 2001, for the
exercise of the 1999-A and 1999-B warrants at $1.00 and for the exercise of the
1995 warrants.

         The following shall be added under the "Business" section of the
Prospectus:

                  On April 20, 2001, the Company signed an alliance agreement
with Marconi Online Systems, Inc., a subsidiary of Marconi, plc, for a five year
term. This agreement expands upon and supersedes the March 5, 2001 agreement
that had been entered into between the parties.

                  Pursuant thereto, the Company has agreed to market, promote,
and generate demand for certain Marconi products, including Marconi's data
handling service, and not to promote products which compete with these Marconi
products. Marconi has agreed to market, promote and generate demand for and
sales for certain of our products, including our e-Port terminal. The





agreement sets forth pricing for each party's products which shall be made
available to the other party (or its customers). The Company had previously
reported that at the time the alliance agreement was entered into, Marconi was
to place an order with us for our products. Marconi has indicated to us that it
anticipates placing an order with us for our products in the near future.

                  The alliance agreement grants to Marconi the right to purchase
up to 3,000,000 shares of our Common Stock at $1.00 per share at any time until
June 5, 2001. Marconi also has the right to purchase up to 3,000,000 additional
shares at $1.25 at any time following 180 days after exercise of the first
option. If Marconi does not exercise the first option, then the second option is
exercisable at $1.25 per share until September 5, 2001.

                   If Marconi exercises these options, Marconi has been granted
the right of first refusal on acquisition of the Company, the right to have
representatives on our Board of Directors, and the right to purchase an amount
equal to any new securities sold by the Company to a party other than Marconi on
the same terms and conditions as granted by us to the other party.

                  On March 29, 2001, the Company entered into an OEM Agreement
with Automated Merchandising Systems, Inc., a glass front vending machine
manufacturer. The agreement provides that we will sell our e-Port terminals to
AMS in such quantities as AMS shall require for use by AMS in its vending
products. The agreement is for a five year term. The Company also granted to AMS
the option to purchase up to 1,000,000 shares of restricted Common Stock at
$1.00 per share at any time prior to June 30, 2001. We have agreed to use our
best efforts at our cost and expense to register all of these shares for resale
by the holder thereof under the Act.


         The date of this Prospectus Supplement No. 2 is April 24, 2001.