By Alex Barrotti, founder and CEO of TouchBistro
Restaurants are diversifying the payment methods they accept. Cash, credit, and debit payments are almost universal across full-service restaurants in the U.S., but restaurants are increasingly accepting digital wallets like Apple Pay, Google Pay and Samsung Pay.
As of December 2018, it was found that nearly 20% of FSRs are set up to take all three. These findings are based on an independent study conducted by research firm Maru Matchbox on behalf of TouchBistro in December 2018 of over 500 FSR operators.
Mobile payments are changing the restaurant industry in three significant ways:
First, as consumers are becoming more comfortable substituting their mobile phones as a payment form factor that replaces plastic, they are taking advantage of the convenience and security of tapping their phones on payment devices to pay for their orders rather than digging through their wallets for one of their credit cards. Nowadays, no one will leave their homes without their cell phones, but they may opt to leave without a bulky wallet of charge cards. Early adopters of smart watches experience even more convenience with mobile payments.
The second way mobile payments are having a major impact is with online ordering. Online ordering platforms are now used by four out of five restaurants – such as Grubhub, Uber Eats and DoorDash – increasing revenues and check size. When diners place their orders on their cell phones or tablets, this is done through an app and requires a mobile payment at the time of order.
The third way is where restaurants offer loyalty programs. Patrons of restaurants that have adopted loyalty programs are able to earn loyalty points that are synched with their payment at the time the payment is made, automatically applying awards toward the cost of the order for the convenience of both the restaurant and diner. Most loyalty programs provide an app to place and pay for an order with a cell phone.
The U.S. has lagged behind most other countries in wide adoption of mobile payments. In order to accept mobile payments, a restaurant must have a device that accepts contactless payments, but few have been available in the U.S. until a couple of years ago. In comparison, these devices have been prevalent in Canada for more than 15 years.
With the rollout of mandatory EMV compliance in the U.S., restaurants have been installing EMV payment devices which all accept contactless payments. Virtually all updated POS systems and new payment devices now accept contactless payments, as well. This has opened the door to broad acceptance of mobile payments in the U.S. along with all the convenience and revenue generating opportunities made available with this technology.
Cover photo: iStock