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Musings on the Foodservice Industry

New Ways to Pay Make Life Easier…Or Not?

May 22 2015

Bitcoin. Apple Pay. SquareWallet. Card.io. Jumio. DigitalWallet. Venmo. Dwolla. If you are not familiar with this new lingo of cashless payments and their related verification systems, you had better get up to speed.

The times … they are changing.  Or should we say, there is no more change, or cash for that matter.  There are just mobile forms of payment that could make life a lot less complicated for both the seller and the buyer.

This is such a new and rapidly changing landscape that the ways in which we pay for things and which businesses then account for those payments are still working out the kinks.

While they may appear to be seamless and broad-based, cashless payments are actually somewhat limited at the present. For example, SoftCard developed by Verizon, AT&T and T-Mobile, only works with American Express, Chase and Wells Fargo. And LoopPay, which works with a magnetic swipe, requires that the consumer buys a separate phone case with a special transmitter. alternative payment methods

These are all relatively minor issues when you view mobile payments as the transaction of the future.  Is your delivery person using a credit card reader attached to his phone to process payments?  If so, you are on track to take full advantage of the new technology. 

Mobile payment processes are but another in a growing list of electronic and digital methods to make the restaurant owner’s life (and his customer’s) easier.  Online ordering, for instance, has helped pave the way towards streamlined menu fulfillment, back-of-the-house efficiency and improved customer relations and accounting.

Here is a quick view of some of the mobile payment systems now on the market:

  • Apple Pay – This method has made the most noise so far. You simply hold your phone near the merchant’s NFC reader (near-field communications), it unlocks automatically and you scan your fingerprint to authorize payment.
  • Bar Codes – This is the most familiar way of purchasing. While currently limited by the need to have a bar code for each store, a new system called CurrentC will offer an easier more expansive method that incorporates many brands.
  • Google Wallet – The GW allows users to store debit cards, loyalty cards, gift cards and credit cards. GW incorporated SoftCard into its system this year and, while slower than Apple Pay, seems to be a likely competitor.
  • Digital Wallet –Just download an app on your phone and you can link it to your bank account or payment card.
  • Bitcoins – There has been a lot said and written about this fluctuating digital currency. One good thing is that its cryptographic nature protects your security and your money.  But Bitcoins are also highly volatile and most retailers won’t touch them.  Still, its technology seems appealing to many businesses including Etsy and Overstock.com. 
  • Other digital payment ideas and systems – Card.io is a mobile app that allows android consumers to scan payments. Dwolla is a payment network that allows businesses and people to send, request and receive money. Jumio helps businesses reduce fraud on digital payments.

Like anything worthwhile in the digital world we live in, mobile payments are, to “coin” a phrase, “a dime a dozen”.  So, it pays to be aware of this fast changing world and to be prepared to take advantage of them as they arise.

What’s more, this may end up being a customer relations nightmare down the line.  Will you have the right system in place to accept the most popular digital forms of payment?  How will you know which mobile payment form works best?

It may be a while until we are living the cashless life.  But millions of mobile subscribers are already paying for purchases with their smartphones. And the industry will be worth a purported trillion dollars by the end of 2015.