April 22, 2020

Will Cash No Longer Be King? The Rise of Digital Payments

When bars and restaurants look to reopen, first they will have to deal with government regulations on when they can reopen and what restrictions may be in place. The second will be ensuring they set up their operation for what the future of guest experience may look like and help ensure they are as making guests feel comfortable. According to research from Datessential, over half of guests would feel uncomfortable dining inside of a restaurant right now.

The psyche of the guest when they return will want less crowded venues, visible cleaning procedures, and mitigating any chances for contact where possible. Automatic doors, measuring temperature when entering the venue, and staff wearing PPE may all be new normal for the foreseeable future.

Another possible movement will be venues moving away from the use of cash. The usage of accepting cash was already debated and like many other factors, coronavirus has become a catalyst for change rather than the reason for. While venues across the country have moved to cashless only businesses, local and state governments have banned this activity in certain jurisdictions.

It is to be noted that the World Health Organization has said that hands should always be washed after handling cash because of the high number of germs most bills contain but has not endorsed getting rid of the tender completely. Touching a bill with coronavirus requires a person than to touch their mouth, nose, or eyes next in order to transmit it.

Mobile payments were expected to surpass both credit cards and cash by 2022 according to this 2018 report but with the rise of digital payment in many operations now with contactless delivery, that date could arrive a lot sooner. We’ll discuss the pros and cons of removing greenbacks from your drawers.

Pros for Moving Cashless:

  • Guests may feel that money is even more 'dirty' despite experts say that COVID-19 does not live on porous surfaces as long because the coronavirus can become trapped inside reducing its spread. Coins are more likely to keep the virus longer than paper bills.
  • There is less risk of being robbed by outsiders or employees skimming the drawer. With cash no longer readily available and everything being tracked digitally, it makes the business less of a target for both.
  • There is efficiency to be gained by going cashless. Employees and management can cut down their time counting out banks and tills before and after shifts and the need to do bank runs are eliminated. While not a lot of time is spent here, this extra time can help reduce rising labor costs.

Cons For Transitioning to Cashless:

  • Credit card fees taking an estimated range of 3-4% is a direct hit to the bottom line.
  • Disenfranchised populations are much less likely to have a credit or debit card causing a potential public backlash of businesses excluding certain demographics and customers. This becomes a social issue and a potential PR nightmare.
  • In high-volume transactions, credit card processing can be much slower depending on the POS being used.
  • Employees are used to walking home with cash.

Preparing For the New Normal

Legally, you may not be able to go completely cashless. Legislation in NYC, Philadelphia, San Francisco, and New Jersey have all banned cashless establishments citing concerns it is not inclusive. However, this doesn't stop venues from encouraging mobile or credit card payments first.

For guests looking to pay for cash, operations should have a policy in place where management can still accept cash. If change is an issue, look to provide gift cards or additional items to make the transaction whole and regulars to feel welcome. For employees, they may be used to leaving with cash tips each night but they have already seen a rise in credit cards and making the jump to paychecks instead of nightly tip-outs will not be as hard to do compared to a few years ago. This also ensures wages are tracked and taxed properly, an issue that has come more to light with so many looking to file unemployment the past few weeks.

Sweetgreen announced they were going cashless in 2016 but reversed course in 2019 that all of their stores would be accepting cash again. Shake Shack also scrapped their cashless plans too but made adjustments so credit cards and mobile payments were much easier to accept with kiosks and designated pickup areas. Other have used loyalty programs to transition guest to their mobile apps with Starbucks and Chick-fil-a being two leaders in the space. While cash may be a part of the tender currently received, businesses should expect a further rise in guests asking for contactless payment options. These businesses would be wise to work with their POS to ensure checkout options are efficient and help customers feel comfortable when they do return to on-premise dining and drinking.

Copyright 2020 Questex LLC. All rights reserved. From https://www.barandrestaurantexpo.com. By Jeremiah Batucan.

To view all articles, check out the Internet Travel Monitor Archive

PLAY VIDEO
Play Video