It isn’t only the price and product offer that shape where consumers eat these days. Technology also has a vital role to play in the UK foodservice sector, especially when it comes to payment options that promise to speed up service and improve convenience. FEJ reports.
The introduction of contactless payments for transactions under £30 in the UK has revolutionised the way that customers pay in recent years, with cards being used more frequently for lower value payments.
Contactless is becoming the new norm and it is proving especially valuable in environments with high customer turnover, like coffee shops, cafes and fast food restaurants. A huge benefit of contactless is that transactions can be processed in less than a second, so queues are minimised and a greater number of customers can be served, not only improving the diner experience but also preventing restaurants and foodservice companies from losing the business of customers not carrying cash.
“It has had a huge impact on the industry and we are finally seeing the adoption of contactless really accelerating,” says Peter Moore, CEO at Lolly, the provider of Windows EPoS software for the hospitality sector. “Hospitality providers are truly seeing the value of contactless through improved speed of servicing customer during peak trading periods, improved customer services and a higher volume of transactions.”
It isn’t just contactless that is bringing about change in the way that transactions occur front-of-house. Mobile payments is another method which has become increasingly popular since the introduction of Apple Pay and Samsung Pay.
“With other phone manufacturers introducing the technology, this method is likely to continue gaining traction,” predicts Nigel Hyslop, president and managing director UK at card processing specialist Global Payments.
The good news for restaurant operators, says Hyslop, is that mobile payments work in exactly the same way as contactless, using Near-Field Communication (NFC) technology. So if the payment terminal accepts contactless, it will be able to accept mobile payments, too.
However, some believe NFC is yet to capture the full attention of the foodservice sector because many simply don’t perceive it as a driver of sales at first glance, even if it is the fastest method to pay for the customer.
“8% of all our transactions (going over Orderbird pay) are already cashless via NFC,” says Jakob Schreyer, CEO and co-founder of EPoS provider Orderbird. “Moreover it’s this technology making mobile payment possible. What will happen in the coming years is that guests will make their decision for or against a restaurant depending on whether there is a possibility to pay with their mobile phone or not. It’s already now a loss in revenue for restaurant owners who target the young generation as customers and don’t accept contactless payment.”
Tony Franklin, sales director at software firm Orbis Tech, thinks increasing demand for quicker, grab-and-go-style menu items is also now being reflected in the initial service too, with consumers looking for a fast customer service experience. He is in no doubt that the future of payments is cashless.
“In 2015, 75% of all UK retail sales were made by card, a 10% increase in five years, while 18% of all sales were contactless, a rise of 11% in just one year,” he says. “Now, more businesses within the sector will accept a wider variety of different credit and debit cards, not just the most popular cards in the UK, and this is something that Orbis Tech, as software developers, are reacting to more and more.”
However, in order to process the multitude of different data payments quickly and easily, foodservice establishments now need to consider which systems can do this most effectively — a manual till system is now archaic in terms of effective point-of-sale systems.
Instead, says Franklin, operators will require an EPoS software solution that is able to evolve and develop alongside these emerging payment methods.
Guests will make their decision for or against a restaurant depending on whether there is a possibility to pay with their mobile phone or not”
“Couple this software with a PDQ terminal which is contactless-enabled, and outlets will be able to store and totalise the prices of purchased goods both effectively and efficiently, while providing a quick payment method for the customer. To ensure that the business is fitted with the best terminals for their establishment, operators should look to consult their EPoS software provider in order to ascertain whether the software is able to link up to the PDQ terminal effectively. It is essential that they both integrate with one another in order to provide the smoothest possible transaction process and customer experience.”
The mechanics of making all this work are undoubtedly among the more technical challenges that operators can expect to face. In ensuring a seamless integration between the POS and the contactless payment device, there can be obstacles.
“If these services are delivered by different organisations they often blame each other for possible system failures,” warns Lolly’s Peter Moore. “Opportunities are obvious with increased transaction speeds, serving more customers and generating more revenue. Not forgetting the time saving with an integrated system at the end-of-day cash-up.”
The other enduring issue surrounding payment technologies is, of course, security. Moore denies that security and compliance is a barrier to adoption but he does acknowledge that it has inevitable cost implications. “For some smaller providers, non-compliance fees could have quite an impact on the day-to-day running of their business. It is important that the owners push this compliance and support back to their acquirer — they need to be supporting them with compliance.”
Orderbird’s Jakob Schreyer is in agreement. “I think the regulation is clear and therefore security and compliance is not such a high barrier to this industry. All terminals have to be licensed in Europe, which implies that every terminal on the market is granted. All security and compliance requirements must be granted by the payment provider upfront. This is very comfortable for the foodservice industry.”
What foodservice operators do need to be vigilant towards is card fraud and data theft. This is a growing problem as fraudsters become ever more sophisticated. Restaurant and foodservice companies have to ensure their payment systems are safe and customer data is protected.
“This is where the Payment Card Industry Data Security Standard — or PCI DSS — steps in,” says Global Payments’ Nigel Hyslop (right). “PCI DSS is a set of globally-agreed compliance standards for any retailer or service provider who processes, stores or transmits cardholder data. It is designed to provide a framework for minimising fraud and safeguarding customer’s data. Regular updates are made to the terminals remotely, to ensure that businesses are adequately protected,” he adds.
Card processors can provide a checklist of steps to take if restaurant, hospitality and catering managers are concerned about the authenticity of a card, such as calling them for additional authorisation or requesting proof of address if they are particularly suspicious.
The best way to achieve high levels of security and prevent any opportunity for fraud, say experts, is to utilise the technology which operators already know and recognise, such as advanced EPoS systems that are fully integrated with the payment system in place. This system will allow operators to not only monitor but protect their business from such threats.
For some smaller providers non-compliance fees could have quite an impact on the day-to-day running of their business”
“EPoS systems that store data on a secure hosting cloud, in much the same way that Orbis Tech’s modular system will, removes the need for managing and holding significant IT infrastructure on site,” says Tony Franklin. “The security of an outlet’s transactions and data is paramount to ensuring the safety of both the customer’s and the business’ details. This information can only be accessed by authorised personnel, thus removing the opportunity for the data to be viewed by any member of staff.”
Interestingly, growing uptake in contactless payments comes as increasing numbers of operators embrace self-service kiosks as a way to have less serving staff and more kitchen staff serving more food.
Steven Rolfe, managing director of PointOne EPoS, says there are already some very successful examples of operators expanding their payment and service methods by integrating a self-service offering, which enables the customer to order and pay completely ‘cashless’ using touchscreen kiosks.
“We have already implemented this technology in ‘Tossed’ a chain of salad restaurants and this has reduced their queues, improved the customer experience and overall made it a more fun method of ordering and buying meals,” he says. Naturally, a self-serve kiosk will need to have integrated payment with contactless payment to work and this in itself poses a challenge that operators need to tackle head-on. “The precondition is that the card holder understands exactly how to self check out. That means that the foodservice industry has to educate and enhance their target groups,” says Orderbird’s Jakob Schreyer.
Rolfe at PointOne is convinced that the biggest trend in the fast food and casual dining sectors over the next few years will be the integration of self-service and cash-less technology into existing operations, along with new payment methods. “The main driver for self-service tills, such as our kiosk, along with online ordering and customer-facing apps integrated with new payment methods, such as ApplePay, will be enhanced customer experience, which in turn will drive higher footfall, ensure more loyalty and ultimately result in reduced costs and higher margins,” he comments. “The introduction of self-service technology will transform the way in which restaurants manage their business.”
Quick, efficient service at POS and the elimination of queues have turned the typical restaurant experience on its head in recent years. Foodservice operators must now aim to drive even greater efficiencies with a robust and integrated approach to payment.
One in four card payments is now contactless
A quarter of all card transactions are now made via contactless, latest figures from The UK Cards Association show. 325 million purchases were made using contactless debit and credit cards in November 2016 (the most recent month for which data is available), accounting for 25% of all card payments in the month. The rise in contactless payments led to a record £2.9 billion being spent using the technology in November. This is an increase of 184%from a year ago, when contactless spending passed £1 billion in a month for the first time.
There are now 101.8 million contactless debit and credit cards in circulation in the UK. Nine in 10 (88%) contactless transactions are made using a debit card, a higher proportion than for card payments overall (78%). The one-in-four milestone comes just three months after contactless reached a fifth of card transactions in August. In November 2015, 11% of card transactions were contactless. The average contactless transaction was £8.95 in November, up from £8.03 a year ago.
102m: Number of contactless cards issued in the UK
27%: Annual growth in contactless cards
325m: Contactless transactions per month
440,000: Bank-owned terminals available in UK
£8.95: Average contactless transaction
Source: The UK Cards Association, November 2016