Mar 01, 2013 Sean Albert
As cash payment becomes increasingly rare, the restaurant industry is picking up speed in terms of adopting alternative credit payments like online bookings and independently managed prepaid cards, according to The Huffington Post.
Foodies love electronic payment
Less than 20 percent of restaurant payments were made in cash in 2012, the source claims, which opens up a nationwide discussion on strategies for maximum profits in a world of necessary electronic payments. The Huffington Post says the trend of paying via plastic has grown quickly as fewer than 10 years ago, credit, debit, prepaid or ACH cards were used for 15 percent fewer transactions.
Liz Garner, a spokesperson for the National Restaurant Association, said people in the industry believe taking credit cards is necessary to keep business strong.
"Restaurant owners feel like they have to take these cards in order to compete," she told the source.
In fact, some businesses in the food industry actually began out of this reliance on credit card and mobile payment use. Snapfinger, a takeout company that works directly through a smartphone application, saw its biggest Valentine's Day turnout this year with 1.6 million orders placed. Jim Garrett, the organization's CEO, claims newly available technology can not help businesses profit from sales by allowing them to cater to consumers in new, more efficient ways.
"Restaurants cannot ignore the fact that each year, millions more diners turn to their mobile devices for finding, ordering and paying for food," he said in a statement. "Restaurants should also embrace this change, not as a trend in losing personal interaction with diners, but in better serving more hungry customers."
Restaurants may profit more with plastic
While the Snapfinger results focus around a day of financial splurging for many, they indicate consumers may be willing to spend more than in a cash transaction when using credit cards or forms of alternative credit: The average order out of more than one and a half million made on February 14 cost $35.22.
Another way for restaurants to maximize income with further mobile payment and credit card use is by issuing their own prepaid cards to patrons, The Huffington Post reports. This practice, the source notes, can help businesses avoid fees charged by merchant account providers, which allows them to retain thousands of dollars each year.
The only concern experts have is where tips will fall as cash is pushed out of restaurants, which is reflected by restaurant owner Sara Jenkins of New York.
"I know that I personally run around with no cash in my wallet and just swipe my debit card merrily left, right and center whenever I want something," she told The Huffington Post. "And I feel like when you open a restaurant, you just have to accept the reality of that."
However restaurants choose to move forward in accepting electronic payments, the source insinuates cash may be pushed out of this sector almost completely within the next several years. Business owners may choose the personalized prepaid card currently featured at Starbucks, use mobile payment options like Square heavily or set up online pre-sale technology for visitors to register and pay for meals before they enter a venue.