By: Mark Bunney, Director of Go to Market Strategy, Ingenico Group North America
Contactless has been the predominant payment method used by consumers in numerous markets worldwide, led by Australia, Canada, Turkey, Poland, Hungary, the United Kingdom and much of Asia. In Australia alone, contactless payments account for about 80 percent of transactions under A$100. And while the U.S. has been slower to adopt contactless payment technologies, recent announcements from card issuers and banks show a strong push for contactless growth.
Contactless payment is gaining traction in the U.S.
Mastercard attributes part of recent transaction growth to more contactless cards in the market and wider merchant acceptance for formerly small-value cash payments. Visa says it expects to have 300 million contactless cards in the U.S. by the end of 2020, and 100 million by the end of 2019.
Major U.S. banks, including Wells Fargo and Chase, are also on board, distributing their contactless credit and debit cards to new customers and to existing customers as cards come up for reissuance. Taking a more aggressive approach, Bank of America announced a saturation campaign that will reissue approximately 4 million contactless credit and debit cards to existing cardholders in New York, Boston and San Francisco.
The New York City Metropolitan Transit Authority (MTA) has also launched its OMNY fare payment system that accepts contactless cards and digital wallets, and other U.S. cities are launching their own transit programs, some of which will use mobile apps.
Contactless payment is not just about credit and debit cards. Use of mobile wallets like Apple Pay and Google Pay, along with brand-specific mobile payment apps like the Starbucks app, is also on the rise in the U.S. From 2016 to 2022, mobile payment transaction volume in the U.S. is projected to grow 36.6 percent year over year. Even though transaction volumes lag the rest of the world — with China at the lead — the U.S. has still reached 25 percent adoption rate in just three years since mobile wallets were introduced.
Customers welcome the Pay-at-the-Table option
What does this newfound interest in contactless mean for restaurants in the U.S.? As more customers look to pay with contactless cards and mobile wallets, they are more likely to demand to pay-at-the-table. It allows them to take advantage of the convenience of tapping a credit card or mobile phone and the added security of not sending that credit card off in the hands of a server.
Pay-at-the-Table is a trend that, like contactless payment adoption, has broad acceptance in Europe and Canada and is starting to gain traction in the U.S. Patrons of casual and fine dining restaurants like the safety, convenience and satisfaction of paying tableside. Recent data shows that 79 percent of frequent diners would prefer all restaurants to offer a Pay-at-the-Table option, while a National Restaurant Association survey showed 61 percent of diners agree that server handheld tablets improve their guest experience.
Meeting consumer demand for a more convenient and secure method of payment and delivering a better guest experience are just two of the benefits that restaurants can realize by deploying Pay-at-the-Table technology. Others include:
- New efficiencies. The traditional payment process between server and guest can take up to 12 steps and three trips to the POS terminal, adding up to an additional 9 minutes per table. With Pay-at-the-Table, servers don’t have to spend time shuffling credit cards back and forth, freeing them up to focus on customer service. The time saving also helps reduce wait times for customers and increase table turnover.
- Increased gratuities and tips. Pay-at-the-Table devices can do the math for customers, calculating and suggesting tip amounts so patrons can see what percentages they are tipping. The extra face time that customers have with their server combined with ease of tipping results and increased table turns makes each shift more profitable.
- Compliance with EMV chip technology standards and reduced chargebacks. Pay-at-the-Table solutions also give restaurants a path to EMV compliance, lifting the burden of liability for fraudulent transactions, as well as a means of accepting contactless payments. Many Pay-at-the-Table solutions offer EMV compliance and are equipped to accept contactless and mobile payments.
- Data for analytics. Restaurants can use data collected through the Pay-at-the-Table system to evaluate operations based on most popular dishes, busy periods, average table turnover time, inventory and ordering, and staff performance.
Overcoming obstacles to implementation
With contactless payments on the rise in the U.S., consumers will begin to demand to use it everywhere they spend money, and restaurants are certainly no exception. As their solution providers, it’s our role to help the industry make the migration. The benefits are clear, and the technology is primed, it’s now about working with restaurants to help create the ideal Pay-at-the-Table experience they want for their customers.
Some may want a full overhaul of their server station and POS solutions, while others may want to add on to their existing infrastructure; some may want more traditional wireless terminals while others may opt for tablet-based solutions. The bottom line is that it’s now up to us to make it a reality.