Article
Mobile payments continuing to grow in QSR
Why is mobile so key to digital ordering success? This question and others are answered by experts.
September 29, 2015 by Travis Wagoner — Editor, Networld Media Group
Customers increasingly want the convenience of ordering in advance, pre-paying and picking up their food upon arrival at the restaurant, which are the top reasons restaurant operators turn to mobile payments.
Some suggest that the mobile-led digital ordering of today will propel digital ordering to over 50 percent of all transactions at non-pizza restaurants by 2022 — that is, in half the time that it took pizza restaurants to reach 50 percent digital, Noah Glass, founder and CEO of Olo, said in an article.
Why is mobile so key to digital ordering success?
Also according to Glass' article, there are three main characteristics of mobile that make it distinct from online ordering:
- Smartphone are always with us, on our physical person, at all times of the day (in fact, 83 percent of Millennials sleep with their smartphone in reach). That opens up the ability to use the smartphone to order at any time, not just when one is sitting at an Internet-connected computer
- Digital ordering apps are housed on the customer's smartphone and so maintain the customer's logged-in state that gives him/her access to favorite/past orders, payment credentials saved securely on file. That means a more convenient ordering experience that requires fewer clicks, which makes many customers prefer ordering through a mobile app even when they're sitting at an Internet-connected computer.
- Combined with the smartphone being on the customer at the time just before and at pickup, the fact that the smartphone can communicate its location back to the digital ordering service, and thus stay in sync with in-store operations, enables reimagined experiences for curbside pickup and delivery for restaurants of all kinds.
Subway is an example of a restaurant chain to adopt mobile payments. The chain began using its Subway App and order.subway.com in July. The new features offer the added convenience of remote ordering and payment for its customers in the U.S. Later this year, the brand also plans to add PayPal as one of the options customers can use to pay for meals when they order remotely or pay in-store using the Subway App’s mobile payment feature. Customers may also use Android Pay or Apple Pay as payment options for using a mobile device in-store at the point of sale.
"These new features offer the added convenience of remote ordering and easy and secure payment options for customers to pay for their meals using a mobile device in-store at the point of sale," said Ken Moy, director, Global Payments / Emerging Commerce for Subway Restaurants. "With the addition of PayPal as a payment option later this year (to a roster that already includes Apple Pay and Android Pay), SUBWAY Restaurants offers multiple forms of mobile payment at its 27,000-plus U.S. store locations, the most across the category."
QSRs and mobile payments
QSRs are moving toward mobile payment technology.
We see that in two categories — card-present and card not-present, said Gregory Burch, vice president, Mobile, Business Development and ISV Partnerships at Ingenico Group, a manufacturer of fixed, wireless and mobile POS services.
"The challenge for restaurants in quick service with sit-down dining is, if you want to pay on your phone, they (a server) are not going to take your phone away from the table, like they do for a card, to make a payment," Burch said. "So for card-present, in sit-down dining, there are still some operational barriers there to get through. But at QSRs with terminals in front of you, where you can walk up and order food, those QSRs are rolling out mobile payment technology right now."
Payment inside the phone (in-app payment), or card not-present options, are still in research, Burch said. Overall, that form of mobile payment is still in the early days for QSRs.
"There is a lot of research being done in labs right now to enable acceptance of mobile wallets in restaurants at the table," Burch added. "We are also seeing users roll out devices in restaurants to accept mobile wallets at pay stations or at point of sale."
What are some benefits?
In addition to customer convenience and time saved for restaurants, mobile payment technology QSRs are increasingly adopting mobile payment technology as a way to enhance the customer experience but also extend their brand into the mobile world.
Brands are recognizing that not only do mobile payment apps enable quick checkout, but options like online ordering and order ahead can increase revenue, and including real-time loyalty rewards and special offers can spur stronger brand engagement.
"When integrated with the point of sale system, mobile payment apps can provide extensive data and analytics about customer ordering patterns and behaviors, providing even greater operations and marketing insights to the QSR," said Tal Nathanel, CEO of MyCheck U.S., which creates custom apps for restaurant groups and chains. "What’s more, even after a customer leaves the location, they carry the brand with them, may be reengaged with the brand through messages and reminders, and rewarded when they return to dine with the QSR again."
It's about trust
With smartphone penetration at such high levels and consumers increasingly looking to use technology to enhance their experience, increased adoption is happening.
"We see increased adoption and usage as significant and ultimately as integral to dining as searching for a location and checking reviews,” Nathanel said. "So yes, customers will use mobile payment apps, but the bigger question is who will provide them with the best experience and added value?"
There’s also issue of trust and how collected customer data will be used. Do customers feel comfortable sharing their personal information?
"The early tech adopters that are comfortable and trust putting credentials in their phone," Burch said. "To what degree still really remains to be seen. Some customers will feel comfortable putting credentials in their phone and paying with their phone. Others will worry about their phones being hacked, or feel more comfortable with offline credit cards where they don’t need a device powered on or charged to make a payment."
Overall, Burch sees Ingenico Group merchants exploring how to accept all forms of payment, including mobile payments, because they ultimately want their customers to pay whichever way they are comfortable.
About Travis Wagoner
Travis Wagoner spent nearly 18 years in education as an alumni relations and communications director, coordinating numerous annual events and writing, editing and producing a quarterly, 72-plus-page magazine. Travis also was a ghostwriter for an insurance firm, writing about the Affordable Care Act. He holds a BA degree in communications/public relations from Xavier University.
