A coin sensor and method of identifying coins by size and also discriminating invalid coins includes a portion of a coin track (63) over which coins (14) pass in a single file, an illumination source (92) for illuminating at least portions of the coins (14) as the coins move along the coin track (63), an optical detector (95) spaced from the coin track (63) for detecting a size of at least a portion of each coin passing the coin sensor along the coin track, and a telecentric lens (94) positioned between the optical detector (95) and the coin track (63), such that the portion of each coin passing the optical detector (95) is seen to have an apparent size and configuration independent of a variation in distance of the coin from the telecentric lens (94) as each coin moves along the coin track (63). The optical sensor and detector (90) can be angled to assist in preventing stray light from the bottom of the coins from being transmitted to the detector (95). The sensor assembly (67) also includes inductive sensors (98, 99) and a Hall effect sensor (97) for discriminating invalid coins.