3 things to consider before adding a new alternative payment method
COVID-19 fast-tracked the adoption of contactless payments around the world, but Australia’s quick service restaurants (QSRs) remain in a bind on the alternative payment method (APM) that best fits their business.
In 2020, cash spending in the country dipped to a measly 1.5% of all spending on food and beverage as businesses adopted COVID-safe practices that favoured digital and contactless payments¹. As a result, the QSR industry had to double down on alternative payments as more diners chose to order their meals digitally through online platforms, apps, in-store kiosks, or pay-at-table technologies.
With almost half of Australians saying digital technology is essential to their daily lives², QSRs have been inundated with opportunities to go digital and implement APMs to satisfy the evolving demands of customers. Now more than ever, the race is on for QSRs to offer seamless, personalised, and customer-centric APMs for the country’s expanding base of digital users.
But how do QSRs determine which APM is right for their business? Here are three key questions as valuable thought starters:
Question #1: What do you want to achieve with a new APM?
Adding an APM needs more careful consideration than is often thought. To determine whether an APM is right for a business, some of the key questions QSR owners must ask themselves are: “What APM is aligned with my brand? What are my specific business objectives for implementing a new APM? Which market am I trying to capture?”
For instance, 60% of millennials see digital as a crucial aspect of their day-to-day lives but they favour in-app payments over other digital methods. Catering to this specific demand would give brands the opportunity to capture this market segment that is now worth $16 billion in Australia³.
“While in-app payments comprise only 2% of the QSR channel currently, use is growing across all age groups - which makes a strong case for adoption on its own,” says Hayley Fisher, Country Manager AUNZ, Adyen.
QSRs must be intentional with adding a new APM instead of using a trial-and-error approach. By being deliberate with what they hope to achieve, QSRs are able to avoid any unnecessary costs and ensure that the APM adds value to their brand.
Question #2: How will a new APM impact customer experience?
Delivering an amazing customer experience should still be the top priority for any QSR when choosing an APM. It’s important to remember that quality over quantity prevails — it’s not about having all the payment methods in the world, rather, it’s about having the payment method that matters to the customers.
Customers put a premium on convenience and QSR brands would do well to keep this in mind when looking to add a new APM. According to Adyen’s Agility Report, customers value seamless experiences whenever they interact with a business:
- 55% of customers will visit stores that they know have no queues or make it easy for them to pay.
- 20% that would like restaurants to use technology to improve the experience, e.g. implement self-service checkouts/kiosks or pay-at-table technology
- 38% like to have a range of payment options available to them
- 22% will abandon their transaction if there are too many steps in the checkout
- 18% expect the payment authentication process to be fast and require no action from them
QSR brands need to carefully think about how a new APM will impact the customer journey. At the end of the day, the customers interact with the QSR brand, not the APM provider, so it is crucial to implement payment methods that enrich the overall customer experience.
Question #3: What will success look like?
First and foremost, a good APM must be easy to use for both the customer and the employees. Having said that, there is no one-size-fits-all APM for the entire QSR industry. The right APM for one brand may not necessarily be right for others, and success could mean different things for different brands.
QSRs can benefit from a customised scorecard that outlines their brand values, priorities, resources, as well as customers’ expectations, and the APM features that will satisfy these criteria. This will help businesses determine if an APM is right for them.
Choosing the right partner
According to Fisher, QSRs need to take time to understand their business, identify and profile their customers, and appreciate all the existing APMs in the market before they take the leap with one or two of these methods. “APMs have risks and costs associated with them, but if a certain method works and is fully maximised, it can yield significant benefits for the QSR,” says Fisher.
Choosing an APM that works best for the business could be an enormous task, but with the right partner, implementing and offering payment methods as they come along will be a seamless process for QSRs.
In Singapore, Mexican restaurant chain Guzman y Gomez (GYG) wanted a faster and more customer-centric in-restaurant check-out experience with their contactless payment methods. GYG successfully achieved this by partnering with Adyen to implement contactless payments to its POS, which resulted in a better experience for the customers. This move also made reconciliation processes easier, which greatly benefitted GYG’s staff members. After implementing the contactless payments, each order was completed 30 seconds quicker, making a positive impact on operations efficiency and revenues.
Contact the Adyen team to learn more about key payment methods Australian diners want, and how you can easily offer them with Adyen.
² ⁻ ³ Fast Food in Australia