Jeremy Julian

Mobile Payments: Security, operations and branding opportunities

April 13, 2016

In part two of our three-part series about mobile payments, we will focus on the security of mobile pay as well as the operation and branding opportunities this technology can give your restaurant. It is our goal to expose the falsehoods and present the truths about mobile payments and share helpful information that could make your restaurant/business leaner and more competitive.

What has been keeping you from adding the capability to accept mobile payments?

If you missed out on our first article about the basics of mobile payments, click on the link to get up to speed and join in on the conversation.

Using mobile payments are not safe for me or the consumer.

FALSE. Mobile payments can also deter fraud in ways EMV cannot. Mobile payment offerings are secure and PCI-compliant. This means mobile payments meet all security requirements enforced upon credit and debit cards. As a result, Americans are increasingly trusting mobile payments in a way not seen in the past. According to The Emotion of Safety and Security Survey, conducted by MasterCard, 77 percent of consumers feel that there are more secure ways to pay than ever before. And an equal number (77 percent) feel that new technologies such as mobile payments are having an overall positive impact on personal security. And more than half (56 percent), currently use mobile digital payments via an app or website or plan to try it soon.

Mobile payments minimize fraud due to the user profiles created on mobile devices, which leave a digital trail of activity (merchant location, device ID, email, user, etc). This digital trail is a clear example of how mobile payments with POS integration can improve the hospitality industry’s operations while saving money. In addition, mobile payments can be integrated into any POS system regardless of whether a merchant plans to update its POS system to be EMV-compliant.

One key security capability revolves around the tokenization of credit cards inside mobile apps. This is a method for protecting card data by substituting a card’s Primary Account Number with a randomly generated set of numbers or alphanumeric characters. This further reduces the opportunity for identify theft. As consumers’ security concerns around mobile payments diminish, their comfort level with using them will continue to rise, which will ultimately create a greater demand for businesses to accept them. As this evolution continues, mobile payment apps that incorporate mobile wallet capabilities (Google Wallet, Apple Pay, etc) will pave the pay for even more efficient payment methods.

If consumers are trusting mobile payments, then shouldn’t your business?

Mobile payment apps are only useful for purchases.

FALSE. Mobile payment apps do much more than facilitate payments; they are also a powerful tool for driving brand awareness and engagement. Restaurants can automate loyalty programs, link dining purchases to consumption and integrate mobile payments into the POS system.

For example, each purchase is automatically tallied and when a customer has met the threshold needed to redeem a restaurant reward, it automatically appears on their phone as well as the POS. This removes human error from the equation and gives the programs greater immediacy for the customers as well as the restaurant. A mobile payments app not only enhances the guest experience, but it’s also a powerful way for restaurants to extend their brand. A single branded app that offers a variety of payment options from Apple Pay, PayPal, Google Wallet, debit or credit cards and provides the convenience of ordering ahead, splitting and paying the bill and tracking rewards serves multiple purposes for both the consumer and restaurant. Taking this capability even further, you can send push notifications for specials, planned events and more. If a customer is one or two orders away from receiving a reward, why not send them a friendly reminder of their progress and tell them to come visit?

Mobile payments hinder business operations.

FALSE. Mobile payment applications enhance operations. In the restaurant industry, since the technology is integrated into the POS, mobile payment apps enable servers to tap into information on their customers’ past consumption and dining preferences with real-time upsell opportunities. In addition, a frequent activity like splitting payments is simplified, as customers do not have to rely on a waiter to do the math. All from their convenient smart phone, customers can now choose which items and amounts they want to pay. Because loyalty programs can be automated, the potential of human error and loss associated with manually entering redemptions or punching rewards cards is eliminated. A plethora of insights and analytics are available to restaurant owners that can help guide better decision-making around menu offerings, promotions, staffing and optimal hours of service.

Mobile payment apps are too expensive.

KIND OF. There are mobile payment applications that are expensive, but if you do your research, you do not have to pay a fortune to have an app that delivers everything your business needs. There are companies offering competitive pricing points for a variety of services. Businesses need to inquire about varying options, and the differing levels of service associated with each tier. In some cases, there are pay-as-you-go transaction rates based on volume sales.

The adoption of mobile payments is growing, inevitable and a win-win for consumers and the businesses that understand they are secure, cost-effective and bring significant value not just in the visibility and efficiency they bring to operations, but as a platform to unite cross-company initiatives.

Mobile payments are the way of the future.

TRUTH. Mobile payments are not only less costly to deploy, but they are also poised for explosive growth in the U.S. Experts predict U.S. mobile payments will grow to $142 billion by 2019 with both national brands and local merchants.

The time has never been better for businesses to embrace mobile payments. For many, mobile payments will be a viable alternative to costly POS updates. By embracing mobile payments in 2016, they will be welcoming the future of payments.

Be sure to join us next week as we conclude our series on mobile payments with more data and research about mobile payments, as well as a small case study about Panera’s 2.0 initiative.

Need to pass the time between our next post? Then check out Custom Business Solution for all your restaurant technology needs!

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