Is iPay the Way?

With the demise of the cheque, is the next logical step the departure from cash payments? If so, what payment options are out there for busy restaurants?

Card payments, although convenient can be expensive to implement; merchant fees and the leasing of payment terminals can often outweigh the advantages. Then there’s the hacking and cloning of cards that has dogged the industry over the past few years.

Starbucks and Pizza Express; both market leaders in the food and beverage industry have just published their findings, following trials of a new payment system, where customers can pay their bills with their mobile phones. Although the trial has been limited to just two models, iPhone and Blackberry the results have been surprising.

During the twelve month trial; run in conjunction with PayPal the online payment company, Pizza Express saw their turnover increase, as customers embraced the system. With just a few taps on their iPhone, customers were able to settle their bill without leaving the table. The conventional paper receipt is replaced by an electronic confirmation, and the customer is free to leave the premises.

Starbucks, the high street coffee shop, say their turnover also increased with the launch of their mobile application – or app. Linked to the already popular Starbucks card, over three million people have taken advantage of the service. The customer’s personal barcode is displayed on the smartphone screen, and all they have to do is order, scan and leave. Howard Shultz, chairman and CEO told shareholders recently that Starbucks Mobile now accounts for 22% of all transactions.

With the continued advances in mobile technology and the hunger for apps, showing no signs of slowing, the banks are beginning to take notice. A partnership to roll out the technology to over forty thousand retail outlets has been signed between Britain’s largest mobile network, Everything Everywhere, which includes operators T-Mobile and Orange and Barclaycard, with both companies claiming the system to be the biggest revolution in payments since the introduction of the credit card back in the 1960’s.

To begin with the banking industry will impose a transaction cap of £15, but as the system becomes more widespread it is expected to rise, eventually allowing any purchase to be authorised by the keys on a handset.

In the U.S. Pizza Hut claimed the launch of their own app generated over $1 million in new revenue in just three months. The Pizza Hut app allows you to not only pay your bill, but place your order too, turning your smartphone into a pocket sized, virtual waiter.

Currently, the disadvantage of this type of payment service is – no universal model available for all restaurants, meaning the customer must download multiple apps for each and every participating outlet.

But as technology races forever forward, it’s inevitable that we’ll see more of these type of transactions taking place, however thankfully, there is one thing the apps can’t do, and that’s deliver the dinner to the table; for this, we’ll still have to rely upon the humble human being.

Published in Restaurant Life (US) August 2011

© Barry Lillie 2011

Advertisements
This entry was posted in Published Articles and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s