Elly Earls looks at the future of payments
Advanced Epos and payment systems might once have been out of reach for small businesses, but today there's no reason that even the most modest of operations can't get access to the technology - and business benefits - larger enterprises have been enjoying for years.
The best systems can not only significantly improve the customer experience, thanks to a choice of convenient, easy-to-use payment mechanisms, they're also offering big behind-the-scenes boosts for businesses, thanks to the unprecedented amounts of information on sales trends and customer preferences they can provide.
"It's a very exciting time with the range of payment mechanisms coming to the market that are open to all businesses, regardless of shape or size," says Seamus Smith, chief executive of payment solution provider Sage Pay. "Whether you're a small business or a large enterprise, everyone can get access to enterprise-standard technology now."
Worldpay UK's chief marketing and commercial officer James Frost agrees: "In the past, these solutions existed, but they might have been a few thousand pounds. Today, you might only have to pay £250 up front and then £50 a month, which brings these systems into reach for even the smaller companies that previously might not have thought that the technology was for them."
So what can operators expect from the best systems on the market today? First off: convenience. "Customers don't appreciate having to queue up for a bill; they want to be able to pay at the table and do so in a fairly convenient way," Smith says, adding that the systems he's most excited about at Sage Pay are the company's pay at table and pay at counter offers, which provide operators with the capability to take payments in different currencies and customers the option to split payments.
"This creates a virtuous circle of customer satisfaction, which is eminently realisable with the technologies and applications that are out there."
Worldpay's all-in-one tablet-based point-of-sale solution My Business Hub is another example. At quick-service restaurants, orders can be placed on tablets in the queue, which reduces waiting time, while at full-service restaurants staff can carry the tablet with them anywhere on the premises and orders can be taken instantly and processed quickly.
Plus, the system is proving useful in prompting servers to ask customers if they need anything more, the net effect being that staff members are empowered and able to engage on a personal level with customers and equipped with the means to drive additional sales and encourage customers to return.
Adds Frost: "We've also done some research recently that looks at the knock-on effect for a business of having the right technology. If you're equipped with professional-looking technology, around three-quarters of the people we surveyed said that was something that enhanced their impression of the business. It's not only a very efficient thing for the business owner to do, it also creates a professional image for their customers."
The integration opportunity
Equally important is that any payment technology an operator chooses to invest in can integrate not only with the business's Epos system but also with everything from table management solutions to loyalty programmes. "Payment applications on their own are fine but where they really add value, particularly in a sector like catering, is where they can integrate with other applications in the business," Smith stresses.
"For example, we've been working with a number of mid-market restaurant chains in the UK and we're not only integrating payment systems with the Epos system but also with the table planning/booking system, as well as enabling things like pay at table, including splitting payments, through mobile devices. Integration is where businesses can seek to gain most from the payment services, so it's really important to look at that integration opportunity."
Zhong Xu, director of hospitality product at Epos system provider Lightspeed, agrees. "We've seen that Epos is becoming part of a larger value chain for retailers, so its connectivity with other solutions is becoming more important than ever," he says. "We need to ensure that Epos fits seamlessly with the various other services retailers are offering, such as reservations, online ordering, loyalty, reviews and payments."
Even just the simplest integration can be incredibly valuable for business owners. My Business Hub is an all-in-one solution that includes a payment system that accepts contactless and Apply Pay as well as cash and credit and debit cards, an Epos system and the My Business Dashboard, Worldpay's online insights tool. Users can see both cash and card transactions on the dashboard, which also enables them to view and compare sales trends, keep on top of cashflow, manage reconciliation quicker and view invoices.
"It allows the business to get a very good view on how they're trading," Frost says. "Some of the features identify the busiest day of the week and the busiest time of the day and it's all served back to the operator in a very simple way, giving them valuable information about their business."
Taking this one step further, the most advanced systems on the market can also collect a huge amount of data about customers' preferences, which can then be used to predict and present suitable products for the future, increasing customer loyalty and, ultimately, revenue.
"In the US in particular, we're seeing a number of new generation point of sale devices coming to market that are very much geared around this notion of being able to identify when a customer comes back to a store and start to accumulate data on their preferences and purchasing habits," Smith remarks.
"Ultimately, that can enable a business to present personalised offers to those customers to ensure that they have a high volume of repeat business, which is very important for certain businesses."
The rise and rise of mobile
When it comes to payment mechanisms themselves, both contactless and mobile are clearly becoming a bigger part of the equation. Indeed, according to Sage Pay's 2017 Payments Landscape Report, contactless spend is now at record levels, with 38% of consumers now saying they regularly carry this payment option with them, while almost 69% of consumers have used mobile payments to pay or receive money in the last six months. This is a huge increase from 2015, when only 1% of those surveyed said they had used a mobile wallet and 4% a mobile app.
"It's become a must to be able to offer seamless mobile payment applications and there are some good reasons for that," Smith explains. "The contactless payment limit is now £30, which covers a reasonable proportion of transactions in the catering world and the cost of accepting those payments is also typically lower than when the card is presented into a terminal. Moreover, those payments come with all the guarantees of electronic payments rather than the risks of cash payments, and it's something customers expect."
"As mobile payment technologies get more advanced, customers are trusting their functions and security more and more," adds Xu. "As these technologies progress, and customers become more confident using them, they will expect businesses to offer them as a standard. We've seen this with many payment technologies and methods over time and mobile will be no different."
That said, cash, credit and debit cards remain the main payment methods carried by consumers in 2016 (Sage Pay's research found that 35% of those surveyed regularly carry debit or credit cards, while PayPal also ranks highly with UK consumers, sitting just behind cash and cards as the most preferred payment option), meaning it's still absolutely essential for hospitality operators to offer their customers a choice of payment options.
"The message from Sage would be that businesses need to be open to capture as much business from their customers as they possibly can and that means offering as wide a range of payment methods as possible," Smith says.
Navigating a confusing landscape
One of the biggest challenges facing operators today - particularly smaller businesses that may not have considered anything beyond a traditional till before - is that, with so many technologies and applications becoming widely available, it can be a busy and confusing landscape to navigate.
For this reason, Smith's main advice is to talk to trusted payment service providers who can really explain what's coming along and which systems and applications can benefit their specific business. "You shouldn't just be saying 'I want a new card-processing payment terminal'; the question is 'What's the application that can give me the most efficiency and best customer satisfaction in my business?'" he says.
It's also crucial to invest in a system that can move with both the business and evolving trends. "For independent businesses, long?evity is key," Xu believes. "Operators should do their research and chose a solution that grows with them, a cloud-based solution that easily integrates with other services, will ensure their software is always up to date and gives them access to the latest features. Our world is changing constantly, so operators should make sure they choose a supplier that can ensure their Epos platform can grow alongside their business."
Finally, operators should also consider that cash is - albeit slowly - on its way out, having been overtaken by other payment methods for the first time in 2015.
"While it's still the predominant payment mechanism in the country at 48% of transactions, it's gone down to less than 50% for the first time," Smith notes. "And we would hope that it would continue to decline given the costs, both explicit and hidden, of dealing in cash for businesses.
"Over the next 12 months, we also believe an increasing range of direct to bank payment mechanisms, such as pay by bank app and digital wallets that use the bank account as a transaction mechanism, will come to market quickly and scale quickly. Businesses need to be geared up to accept those forms of payment."
Ice-cream sites had payment licked
Although not many ice-cream shops have traditionally accepted card payment, let alone invested in a cutting-edge Epos system, Jack Button, owner of beachside café Jack's Jetty Snacks, which serves seaside fare including milkshakes, ice-creams, burgers and coffees, felt it was the only way forward for his Great Yarmouth business.
"Until a couple of years ago, I didn't even accept card payments, but over time I started getting requests to pay by card and I felt that was going to increase," he says. "Now, with things like Apple Pay, Android Pay and contactless, I felt investing in an Epos system was the way to go."
Button opted for Worldpay's My Business Hub for several reasons. First, it's an all-in-one system, which means there's only one monthly payment for the card terminal and the Epos system; second, the easy-to-use item catalogue reduces the chance of employee error when entering orders; and third, the system's business analysis dashboards means the team can gain valuable insights into the café's sales trends.
Button is already seeing increased spend because of the variety of payment methods the system offers, and he hopes to make use of the insights the dashboard offers. "It's very early days, but as time goes on, I can compares sales against last year and as I build the item catalogue I will be able to see what's selling well," he says.
Spoiled for choice
UK consumers want choice when it comes to ways to pay, says Sage Pay chief executive Seamus Smith
"Consumer expectation is driving innovation in the payments space, both online and offline, and businesses need to move with the times or risk losing customer loyalty. The majority (90%) of consumers we surveyed say it's important for businesses to offer customers a diverse range of payment methods. What's more, 58% claim they would be more likely to shop somewhere that offered multiple ways to pay.
"Likewise, businesses say the key benefits of offering a range of payment methods is access to a wider customer base. Customer demand is still the driving factor for businesses when it comes to introducing new payment methods, though legislation has become a more important consideration than beating the competition this year. Increased administration is thought to be the main disadvantage to offering different payment options. Only a quarter of businesses see no disadvantages, which suggests there is more to be done to make this process hassle-free.
"Contactless is still going from strength to strength in the UK. In 2015, 9% of consumers rated it highly, in 2016 this has grown to 14% and will continue to grow. Thirty-eight percent of consumers say they carry this payment option with them."
Hummus Bros dips into Epos
When Mediterranean restaurant Hummus Bros decided to invest in an Epos system, it wanted a solution that was easy to use, stable and able to integrate with the business's accounting system, Xero, as well as giving customers a quick and easy ordering and payment experience. Lightspeed hasn't let the business down.
"Lightspeed delivers on all our must-haves from a system perspective, but also goes over and above this with their self-checkout tills as well as their amazing customer service," says Hummus Bros co-founder Christian Mouysset.
The self-service aspect is one that Lightspeed's director of hospitality product Zhong Xu believes is only going to become more popular. "Consumers' preferences are changing fast as the evolution between online and offline accelerates. We are seeing huge growth in self-service options for restaurants and we think there is a huge opportunity with them in the future as customers demand efficiency and convenience more than ever," he says.
"While this doesn't necessarily mean that there will be less of a need for real staff, automation will help operators by giving them better tools to train and manage staff that will be key in reducing labour costs."
Looking to the future, there are a few additional features Mouysset would welcome to make the experience still more convenient. "We'd love to see the system offer online delivery with ordering that's connected to the Lightspeed till," he says. "Insights into our customers is also important, so we'd like more analytics and alerting based on the data."
Sponsor's comment: Sage Pay
A common challenge facing those in hospitality is how not to make the payment process an obstacle to good service. Simplicity in payments is key, so the process becomes seamless and staff can focus instead on food and ambience.
Mobile ordering devices in restaurants or cafés, integrated with Sage Pay's Pay at Table solution, allows servers to open their tables on a point of sale (PoS) terminal and ring up, pushing orders to the kitchen. When servers give tables their cheque, the payments device can retrieve the cheque by table number or cheque number, and the device can be used to leave a gratuity, split the bill, and take payment. The device will then automatically close off the table, making turnover more slick.
Payment habits are constantly evolving and we're always looking to match requirements, providing all the necessary stages, but carried out in a more shorthand way, for a better consumer experience.