Last month, Visa made headlines by offering a group of small businesses $500,000 to switch to cashless registers. While the news took some business owners by surprise, cashless societies and online ordering have been big topics of conversation over the past few years.
Credit cards and mobile apps have been many consumer’s preferred form of payment for many years. Companies such as Apple, Facebook and PayPal are making it easier for businesses to accept alternative forms of payments and consumers want to use the most convenient payment option available.
For many restaurants, accepting cashless transactions means increasing convenience, security, and ease of use for both businesses and customers. Other worry about transaction fees and the risks of chargebacks. Here are some of the benefits to offering digital payment options for online orders:
Online Ordering: Consumers Crave Convenience
It’s no secret that today’s consumers are focused on convenience more than ever before. People are choosing at-home entertainment like Netflix, using e-commerce service like Amazon, and looking to third-party delivery services to make dinnertime easier. Consumers want this same convenience when ordering food online.
Many customers, especially those placing large orders, need to have a pay ahead option so transactions are more seamless. For example, consumers who are ordering carry out as part of a group may not be present at the time of pickup so having a pay ahead option is key.
With so many restaurant options available, consumers are more likely to take their business elsewhere if the transaction is inconvenient. According to a recent report by The Baymard Institute, many consumers abandon an online orders if their preferred payment method is not available. This could result in hundreds of dollars in lost orders and less loyalty among customers.
In 2015, Westpac’s Cash Free Report found that Australian smartphone users predicted that most Aussies will be cash-free by October 2027. “In the last 12 months there has been a 200% increase in Westpac customers using their mobile to tap and pay,” said Elliot Smith, Westpac’s Head of Consumer. “Cashless technology is the way of the future.”
Some businesses are testing cashless environments by only accepting credit cards and digital payments. Sweetgreen, a 64-store American restaurant, reported that it’s seeing 5 – 15% more transitions with their cashless model. This year, the company is continuing to expand while its remaining locations adopt a cashless approach.
More Efficient Transactions
The positive benefits of accepting digital payments online are impacting more than just consumers. For some restaurants, less cash transactions has helped increase in employee productivity. Other restaurants have benefitted from the insurance that up-front credit card transactions provide to takeaway and delivery orders. Restaurants who process a customer’s payment in advance have insurance in case an order is never picked up.
Depending on what POS you use, it can take up to 8 steps for your staff to close out of cash orders. Contactless payments and credit card transactions help reduce this friction for your staff and allows customers to receive orders quickly.
Challenges of Going Cashless
As the cashless payment trend becomes more popular, it’s important for you to understand the challenges of removing cash completely. Restaurants that are considering accepting digital payments should compare transaction fees and understand the risks of chargeback payments. Although chargeback payments are rare, they can occur when a consumer reports a fraudulent transaction.
Restaurants who are considering removing cash completely should also pay attention to the store’s demographics. While many consumers have already adopted a cashless approach to spending, 9% of the population still prefers cash. This includes teenagers who don’t have access to credit cards. Some areas also set up laws to prevent retail establishment from discriminate against cash buyers.
Regardless of the pros and cons, accepting cashless transactions is ultimately up to you. Many restaurants are now accepting digital payment online to provide consumers with a diverse set of payment option. To learn more about how you can start accepting digital payments including Apple Pay, visit Mobi2Go.com/Mobi2Go-Payments