Mobile Payments On The Rise
Cayan Genius Platform (it integrates into our Point of Sale system) allows customers to pay how they want, where they want, and be on their way quickly—whether it’s through lightning-fast chip card transactions or any of the array of mobile payments on the market. You’ll be ready to say “yes” to any and all customer payment requests, because Genius supports: credit, debit, EMV/chip cards, gift cards, Apple Pay, Android Pay, Samsung Pay, and more.
Mobile payment tech is still in its early days, after all but experts predict that mobile payment will become the preferred payment choice in the future. Mobile payment and EMV will take off concurrently because the rollout is enabling operators to accept mobile payments at the same terminal (Genius Platform)
Mobile payments industry is ripe to becoming one of the next hottest sectors in tech.The speed in which we will be able to carry out transactions continues to show us a compelling movement in the evolution for mobile payments and the trend that by 2020, 90 percent of smartphone users will have made a mobile payment.
eMarketer forecasts the number of in-store mobile payment users to rise at a 40% five-year CAGR to reach 150 million by the end of 2020. It represents 56% of the consumer population using Mobile Payments during the year 2020. It also reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020. By 2017, total mobile payment volumes will reach $780bn, climbing to $930bn in 2018 and $1.08tn in 2019.
Because of this enormous growth — and potential growth that mobile devices present — we can expect to see the mobile payments industry and startups in the space evolve to meet the growing demands of users.
Here are some key takeaways from the report:
- In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.
- Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.
- Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.
Everyone is addicted to their smartphone these days, so why not use that to your advantage? Hospitalitytechnology.com found that more than half of diners base their decision of where to eat based on whether or not a restaurant has mobile payment capability and if they have a user friendly app. Some restaurants need to catch up though, as only 49% allow mobile payment and 41% have an app. We offer both!
Some of you reading this blog may be thinking to yourself, “Wait a minute – you can pay with your smart phone now?”
The answer is yes, and consumers have slowly but surely flocked to using mobile payment, mobile wallet, and mobile money transfer, so much so that your restaurant cannot ignore it for much longer.
If you’re thinking that mobile payments – or paying by phone – is just a fad for millennials trying to keep a phone in their hand longer, think again.
- 39% of smartphone users admitted that, if the option were available, they would pay with their phone in a restaurant.
- Mobile payment transactions currently account for about $50 billion in sales annually, and in 2019, are expected to amount to $142 billion.
While some argue that mobile payments are a needless technological advancement, they have surprising benefits for both restaurants and their guests. Sure, it’s convenient, but there are also added security benefits and quicker transaction speeds compared to other payment processors. Let’s go over the fundamentals of mobile payment for restaurants and why yours shouldn’t brush it off so easily.
1) Mobile Payments Are Secure
There are a lot of concerns surrounding the security of mobile transactions in restaurants. Some believe that when payment information is accessible through one’s smartphone, they are at a higher risk for theft and fraudulent use. In fact, 47% of cybersecurity experts surveyed by ISACA do not believe mobile payments are secure.
However, this is by no means the end of the discussion when it comes to the security of mobile transaction, because developers have taken steps to enhance the security of this growing sector of transactions.
Mobile payments require many extra steps to complete a transaction. Some payment methods require your fingerprint for the payment to be accepted. Also worth mentioning is that mobile transactions aren’t exactly direct. Laura Knapp Chadwick of the National Restaurant Association went on record saying the following:
“Many mobile payment apps encrypt or scramble credit card information before it ever reaches a restaurant’s mobile payment acceptance terminal. This means hackers and criminals pose much less of a security threat. Because the customers’ information is encrypted, it’s one less thing restaurateurs need to worry about protecting on the back end.”
Business Insider reported that through mobile payments, card information is tokenized, “which means that it cannot be obtained and used for fraudulent transactions.” This puts the information of your business and your customers in a much more secure place.
2) Mobile Payments Are Becoming Commonplace
Mobile payments were definitely slow to adopt in their early days, but no longer. Restaurants are installing mobile payment equipment at an exponential rate. Let’s take a look at some stats from the National Restaurant Association.
- 43% of all restaurant operators currently offer mobile payment options.
- 26% of restaurateurs said they would offer these options within a year.
- 31% of fast casual establishments offer these options.
- An additional 25% of FSRs will bring in this capability within the next year.
Some pay-by-phone providers – like Apple Pay and Android Pay – require restaurants to adopt special technology for NFC compatibility. Restaurants nationwide have already brought in this technology.
However, Samsung Pay uses Magnetic Secure Transmission (MST) for mobile payments, which makes the process of mobile payment easier for customers and restaurants. By simply touching a Samsung phone to magnetic stripe (magstripe) card readers, an authorized payment will be made. This makes Samsung Pay among the most widely accessible mobile payment options for restaurants and users.
3) Mobile Payments Are Fast & Easy
EMV, or “chip-in” cards, can take up to 12 seconds per transaction. This is extremely tedious and time-consuming for both restaurants and their guests, especially during a busy lunch rush where the line is out the door. Mobile payment is immediate and is processed when the phone registers with the reader. As EMV proliferates, consumers will start taking a closer look at mobile payments like Apple Pay and Android Pay because of the horrible user experience EMV creates,” Jonathan Stark, a mobile consultant predicts. “As more people use it, they will be disappointed by it and may find it easier to pay with a mobile phone.”
With EMV payments being more difficult and taking longer to process, experts predict that mobile will become the preferred payment choice in the future. “Mobile payment and EMV will take off concurrently because the rollout is enabling operators to accept mobile payments at the same terminal.
When comparing mobile payments to cash or credit, American Express reported transaction speeds up to 63% faster than cash transactions (no more waiting around for your guests to find that last penny) and 53% faster than credit processing. This extra bit of speed can keep your line moving and your staff focused on more important tasks.
4) The Future of Mobile Payments in Restaurants
While some restaurateurs are still struggling to accept the role that mobile payments will have in this industry, customers are relishing in the opportunity to pay quicker, accumulate rewards points, and complete yet another daily task with their smartphones. It’s safe to say that mobile payments are indisputably on the rise, and it would be wise for tech-savvy and modern restaurant owners to welcome this trend and get to know its strengths and weaknesses.
The Hospitality Technology 2016 Customer Engagement Technology Study revealed findings that corroborate this, revealing that certain mobile technologies do play a part in influencing consumers’ restaurant selection. More than half of consumers queried (56%) say that the ability to use mobile payment has bearing on where they choose to eat. Meanwhile 57% say that a restaurant with feature-rich, useful mobile apps will get their business. The chart below maps out just a few of the mobile elements that diners are naming as important.