Restaurant Payment Trends That Deliver Efficiency & ROI
In the near future, restaurant guests could be paying for their meals with the palm of their hand.
No, it’s not sorcery, it’s already happening in Austin, Texas, where the Arbor Trails Whole Foods store is offering “palm recognition” service via Amazon One. As recently reported by Progressive Grocer, customers create a “palm signature” linked to bank card information and, voila, checkout becomes quicker and easier than ever.
And Whole Foods isn’t the only brand making payments as easy as the wave of a hand. As HT has reported, Carnival is empowering cruise guests to conduct transactions via wearable devices that make orders and purchases as simple as a tap.
Palm recognition and wearable devices are just two payment innovations possibly headed to restaurants — and they are certainly indicative of an over arching trend.
“Restaurant guests are looking for accuracy, security, convenience and speed, especially as they become accustomed to services like Amazon’s one-click purchases, automatic toll payments, and emerging grab, scan, and go options in some grocery stores,” says Daniel J. Connolly, Ph.D., Professor of Management, College of Business and Public Administration, Drake University.
Restaurants now offer a wider variety of payment options than ever before, with plenty more on the horizon. Here, we’ll explore evolving guest expectations, emerging technologies, and how restaurants can best prepare for what’s ahead.
Executive Insight: Benefits of QR-Driven Restaurant Transactions
"Restaurants, staff and guests all benefit from empowering guests to control their experience digitally. There are three clear ROI drivers when restaurants adopt QR-Code driven ordering and paying: Increase table turn times by 20 minutes or more, driving better revenue outcomes; increase tips for your staff by up to 40%, which improves staff retention; and increase guest satisfaction and loyalty, which boosts loyalty and repeat visits." —Laurent May, CEO, Ready READ MORE
Meeting New Guest Expectations
How have restaurant guest expectations evolved over the past two years, and what does that tell us about the future?
“The obligatory ‘no touch’ established during COVID is here to stay,” says Joe Tenczar, CIO at Sonny’s BBQ and Co-Founder of Restaurant CIOs. “Many guests have been reconditioned to utilize tap to pay, QR codes, or digital wallets.”
Guests’ desire for touchless transactions has indeed fueled a renaissance of payment options. “I see two trends that I personally love,” says Tamy Duplantis, President of Return on Information. “Tap-to-pay, which is much faster than dip or swipe, and scan-to-pay of a QR code on a receipt that allows an auto-payment type like PayPal or ApplePay to eliminate pulling out a credit card. If customers can have a convenience like a saved payment method that auto populates when paying on their laptops, then they now want that same quick convenience when paying in person on their phones.”
“The trend toward payment methods such as QR codes on receipts and handheld devices for servers represents an acceptance by restaurants and servers that the four-step dance (1. Can I get the check; 2. Here’s the check; 3. I’ll come back for payment; 4. Here’s your change/receipt) is not necessary, does not lead to better hospitality, and does not lead to a better tip,” notes Hanson Li, Founder and Managing Partner at Salt Partners, a restaurant holding company that includes San Francisco restaurants such as Crenn Dining Group, Lazy Susan, and Humphry Slocombe Ice Cream.
This new guest expectation for speedy, touchless transactions has brought about changes in point-of-sale technology as well. “During COVID, we saw a number of technology (namely POS) vendors extend their service offerings to include payment services as credit card processing was considered a natural extension of the POS transaction,” says Toby W. Malbec, Managing Director, ConStrata Technology Consulting.
Connolly observes that guests are sometimes frustrated by how long it takes for a server to present the bill and settle the tab. “Pay at the table and self-pay options are becoming more prevalent,” he notes. “Guests rely on credit, debit, and gift cards because they are easy to use and efficient. Mobile pay is even more convenient because guests don’t need to dig into their purses or pull out their wallets. Their mobile phones are almost always in hand.”
And while touchless transactions go a long way toward meeting guest expectations, they also offer operational benefits, notes Laurent May, CEO, Ready. “By deploying technology like digital menus and self-pay at the table services through QR Codes, you can reduce your labor requirements and empower your guests to control their payment and ordering experience. This frees your remaining staff to focus on providing great service instead of running payments or fetching menus.”
Emerging Payment Methods: A Game Changer?
With a range of innovative payment options currently in play or on the horizon, we took a deep dive into what emerging payment trends have in common, and what differentiates them.
“In the near term, I think we will see more focus on digital payments; that is, mobile payments, applications that streamline the payment process, and technologies that provide greater security and protection of guests’ personally identifiable information (PII),” says Connolly.
“At the end of the day, valid payment only needs a unique link to available funds,” says Tenczar. “Digital wallets linked to valid funding sources and secure access are here now and will become even more prevalent. Whether that is achieved through an app, a phone, or a chip embedded in your palm, that unique-to-you ID is all that is necessary.”
Will the rise of cryptocurrency, such as BitCoin, become a significant factor for restaurants? “While I think we are still a ways off from being a crypto-friendly industry, look to the retail space for clues as to when we might see serious adoption begin to occur,” advises Malbec. “As an industry, we are certainly not trend-setters but retail and grocery are often a dependable harbinger of change.”
Will good old cash play a role in future restaurant transactions? “I was recently on a discovery trip to Iceland and it was nearly impossible to spend cash," says Natasa Christodoulidou, Ph.D., Professor, California State University - Dominguez Hills. "For many reasons, including COVID, everyone preferred to pay with digital wallet and credit card. If one is to interpret my Reykjavik experience as a harbinger, it may soon be difficult to spend cash in the near future.”
Prepare for the Future
As restaurants seek to move ahead — and stay ahead — we asked our industry experts how operators should prepare for ever-evolving expectations and solutions.
Connolly provides reassurance amid the shifting environment: “In the end, restaurant transactions will always be about accuracy, security, convenience and speed.”
On a practical note, Tenczar advises, “Make sure your commerce engine/POS API is open enough to be able to handle whatever is coming. While we like to prognosticate, we don’t always know what is next and when it will come.”
What may be the next stage of guest expectation? Looking at how younger guests prefer to pay may provide some insight. “The guest under 30 years of age wants to pre-order, or order as soon as they sit down, and wants to pay electronically and leave without any intense or impatient interactions with the server,” notes Christodoulidou.
“Restaurants are the intersection of personal preference and lifestyle and will always be dictated by customer’s evolving expectations,” advises Malbec. “Operators will need to – more than ever – be ready for changes in lifestyle and preference to ensure that they manage potential security and privacy concerns as the sands continue to shift. That means more than ever that the technology needs to be current and relevant!”