The number of payments made using card, contactless or mobiles will overtake the number of those using cash by 2021, according to a new report. Discover Global Network and UK Hospitality teamed up to produce The Future of Payments report, revealing that customer expectations for immediacy and simplicity during the payment process will increase. But how does this translate in the hospitality industry?
Kate Nicholls, chief executive at UK Hospitality said: “Hospitality is about experiences and people, and how we pay is no different. Although automation aids productivity levels within businesses, this does not mean that human interaction will no longer be necessary but rather changed in order to create a simpler, easier and more enjoyable consumer experience.”
Tipping and splitting the bill
Essentially, the decision to use card, contactless or mobile payments provides greater control and choice for the consumer. The INH International Survey of Mobile Banking 2017 estimates that only 20% of UK consumers carry cash, so it’s up to restaurants and bars to ensure that these types of payments are readily available for customers.
However, one issue that does arise from choosing cashless payment methods when dining out is tipping. When paying in cash, a tip can simply be added to the bill, however, when paying by card, it’s not always clear how you can ask to add a tip to the bill. This, coupled with typical British awkwardness, can mean consumers don’t always tip, for fear of embarrassment. However when tipping by card, it’s important to remember that the money is distributed via restaurant management, so there is no guarantee that the tip will go directly to the wait staff who served you.
Both Pizza Express and Wagamama have introduced apps for splitting the bill. Timothy Love, senior marketing manager at Pizza Express, said: “We are always looking at ways we can improve our customers’ experiences and our new app will do just that.” However, while clearly solving the consumer issue of having to calculate how much each person needs to pay, the argument remains that losing the personal service could mean fewer tips for wait staff.
Your payment method may also have a greater influence on your ordering style than you think. For example, would you still order a starter if paying in advance, or could the sight of someone’s dessert tempt you in a restaurant? Does paying with physical cash make you consider the expense of your meal? There are many ways in which your experience at a restaurant can be altered by your payment method.
Touchscreens and over-ordering
There is much debate around how certain payment methods can affect the way you order a meal. For example, are you more likely to over-order in a restaurant, or online? There’s also an argument in favour of ordering online or via a touchscreen within an establishment, as these methods offer greater choice for consumers and opportunities for customisation.
American business magazine Fast Company published an article on the hidden psychology of ordering food online, and how it’s affecting the hospitality industry. Joe Sheetz, CEO of American fast food and convenience-store chain Sheetz, told the publication that touchscreen ordering reduced the number of times customers claimed sandwiches were made incorrectly, increased turnaround time in the kitchen and helped to upsell particular items by steering customers towards extra toppings. He said: “People discovered toppings they didn’t know we have. We cannot show a menu with all possible scenarios, but we can in touchscreens. We can offer condiment screens, vegetable screens, and a whole bunch of choices people can take their time going through.”
It sounds like technology and paying in advance is not only giving consumers in the United States greater choice, it’s also helping the industry. Here in the UK, fast food chains like McDonald’s have also installed touchscreens for pre-ordering. According to a recent article in The Telegraph, McDonald’s franchisees in the UK have spent some £650m on revamping stores to include self-ordering machines and upgraded the décor to soft wood furnishings, and table service has been introduced so that consumers no longer have to head to the counter. In the St Paul’s restaurant, around 80% of customers now enter and order on a self-service machine, and many of these also opt for table service.
Back in the States, San Francisco-based online ordering service Eat24 also reported some fascinating statistics to Fast Company: “The difference between ordering online and offline is that most restaurants tell us orders are bigger and higher,” said Eat24’s chief marketing officer Amir Eisenstein.
Often, ordering over the phone or in person provides fewer opportunities for ‘add-ons’, such as extra side dishes. Bryce Rademan, the co-founder of Los Angeles mini-chain Spitz, told Fast Company: “When the menu is on the screen and you’re hungry, you add a side dish. You click, it’s ready to go. Over the phone, you just order what you set out to. We see way less impulse purchases of appetisers over the phone.”
But the temptation of ordering more than you had intended could also apply to eating in restaurants. We’ve all been there, waiting for our food and spotting a delicious, freshly-made dessert being delivered to the next table. All of a sudden, it’s all we can think about. But if we’re full from our main meals, we might opt to skip dessert. When ordering online or over the phone, we’re hungry and ready to eat, and may not think about over-ordering.
It seems there’s a balance to be struck, but it is fascinating to see the various ways in which our preferred payment methods and dining styles can affect the way in which we order. As the popularity of contactless and mobile payments continues to rise, I’ll be looking out for statistics on how these quick, perhaps impulsive payments are dictating the way we eat, and more clues as to whether both guests and businesses are happy with the results.