As mobile payments play an increasing part in consumers’ lives, both restaurants and retailers alike are finding themselves in a situation where they must make decisions about whether they will adapt to this change or be left behind.
So how exactly are they doing now?
The restaurant industry is certainly rising to the occasion of mobile payments, especially in the quickservice sector, according to Laurence Cooke, co-founder and CEO of loyalty and payment platform nanoPay. Cooke said while the industry as a whole is taking mobile payments in stride, there are some stand-out brands that are blazing the trail for the rest of the industry.
“Driven by consumer convenience and streamlining payments, Starbucks is the gold standard and continues to show leadership and innovation,” he said.
The coffee giant’s adoption of mobile payments is significant because the company has created a simple solution for customers that integrates payments and loyalty, and consumers have responded well to Starbucks’ mobile payment and loyalty application, according to Cooke. And other major players in the restaurant industry have used Starbucks as a guide to establish their own mobile payments strategy, he said. Dunkin’ Donuts, for example, has also developed a mobile app that gives customers the ability to pay and earn loyalty rewards.
The introduction of Apple Pay, Samsung Pay, Android Pay and other mobile wallets have brought mobile payment capabilities to other quickservice establishments, Cooke said, but loyalty is largely missing from those experiences. Establishments have not yet found a way to integrate mobile wallet services with loyalty programs, which is something customers are interested in.
When it comes to the food retail industry, Cooke said that retailers do lag behind restaurants when it comes to mobile payments. But not for long.
As food retailers continue to update their point-of-sale systems to accept chip-based card payments, they are taking the opportunity to include the ability to accept contactless forms of payment, according to Cooke.
“Mobile payment will be welcomed by food retailers who are looking to streamline checkout and measure time in lane to the second,” he said.
Of course, not every food and beverage business falls neatly into the restaurant or retail category when it comes to mobile payments. Food trucks, for example, are a segment of the business that faces its own set of challenges with mobile payment adoption.
This is what Daniel Nelson found when he founded Food on a Truck, which provides point of sale solutions for food trucks. According to Nelson, he realized that food truck operators face unique challenges in many areas of operation, and while some companies were focused on helping them overcome challenges like making them easier for consumers to locate, there wasn’t a whole lot out there to help food truck owners with challenges associated with payments.
“What I found was they had some challenges especially around being a mobile business that weren’t being met by existing products on the market,” he said.
Right now, Nelson said the vast majority of food trucks use payments processing company Square for their mobile transactions. And while the company does a great job of providing a product that has a low barrier to setup and is easy to use, its technology doesn’t necessarily meet the specific needs of business in the food truck industry as it continues to grow.
“They’re going to need tools that are above and beyond the one-size-fits-all mobile point of sale,” Nelson said.
Part of that comes from the importance of image in the food truck industry, he said, and part of maintaining that image is using the latest payment technology, which means chip-based card readers and contactless payments.
And while most consumers aren’t really looking to make payments at food establishments via mobile contactless technologies just yet, that is shifting slowly but surely, Cooke and Nelson said.
Cooke cited an Accenture survey that found only about 18% of North American consumers use mobile payment methods on a regular basis, but 52% of them are “extremely aware” of mobile payments, which is an increase of 9% over last year. And the consumers that are adopting mobile payment methods are participating in them mostly at quickservice and food retail establishments, he said.
“The trend is clearly there. It is moving. People are getting more comfortable with it,” Nelson said of the shift toward mobile payments in the food and beverage industry. “And it’s going to continue to grow and grow and grow.”
And at the end of the day, the shift is about convenience, both for industry members and consumers, according to Nelson.
“Both businesses and consumers gravitate toward convenience,” he said. “I think in five years it’s going to be super commonplace.”
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