Just a few years ago the vision of a ‘cashless’ society seemed like a utopian dream or the stuff of science fiction. However, the gradual emergence of new payment methods such as Apple Pay, Android Pay, contactless and others supplementing the long serving credit and debit card culture is now eliminating the need for the daily hunt for an ATM machine.
Even more recent is the developing payment and loyalty smartphone app space that gains traction year on year with some significant players such as Yoyo, Como & Pepper.
Taking this one stage further within the last 12 months a new development from FingoPay, developed by UK company Sthaler, seeks to eliminate all of the above and enable the world to pay for goods by scanning securely with your fingertip. Fingopay was developed to address the problems other cashless systems couldn’t solve i.e. the cards or devices necessary to authenticate the payer could be lost or stolen making us all vulnerable to fraud.
This technology is already here and operating in London. Outside of the UK, payment by way of facial recognition and facial gestures is live and with the launch of the latest iPhone X this new technology is set to find its way into hospitality and retail.
The cashless trend is echoed by industry statistics, as research recently published in the Daily Telegraph revealed that the number of cash transactions will drop to just under 13 billion by 2023, while the number of cashless transactions – including cheques, credit cards, debit cards, contactless cards, direct debits, and standing orders – will rise to over 27 billion. In other words, cashless transactions are set to double compared to their cash counterparts.
Millennials & Gen Z Hungry for Self-Serve
Millennials, Gen Z and Quick Service Restaurants are leading the way in many ways, it is the quick service sector that is driving this trend as cashless payment options are fast becoming the method of choice for smaller purchases within bars and coffee shops and the QSR sector.
Today in any coffee shop queue you are more likely to see customers brandishing their contactless card or smart phone rather than reaching for their wallet or purse to fish around for cash.
The cashless bug has bitten all sectors of society from teenagers to pensioners but the majority of the new adopters of these new payment methods are millennials, those born between 1990 and 2010 who have never known adult life without a smart device and the Internet.
It is also this generation that has boosted the hospitality industry over the last decade and made quick service outlets the fastest growing sector in the industry; and this trend is set to continue. According to RnR Research the quick service restaurant sector will achieve a compound annual grow rate of almost 6% up to 2019.
Tossed Case Study
Tossed became the UK’s first ‘cashless‘ restaurant using pointOne’s ‘Kiosk’ technology.
Tossed is a quick service restaurant chain that specialises in providing fresh alternative food options that embrace a healthier eating style. The company procures the highest quality products and these are sourced locally and ethically. Tossed currently has twenty-six sites located throughout London.
The Challenge – to shorten queues, reduce costs and enhance customer experience
Tossed prides itself on providing fresh, healthy meals to its health conscious customers quickly and efficiently. During peak times however, as is typical in any busy quick service restaurant, queues can often dilute the overall dining experience.
Vincent McKevitt, Founder of Tossed said: “We have been working with pointOne EPoS on
this proprietary ‘cashless’ technology. Together we have produced an exciting new ‘ground-breaking’ approach to quick service restaurant operations.
“Most operators face speed & capacity issues at lunchtime, but ours are intensified because we make our food fresh-to-order and most guests like to customise their food to suit their health and taste requirements.
“Having a unique point-of-sale solution allows our team to focus their energy on our speed of production. Improving the guest experience was the prime motivation, however the business also recognised that by using technology effectively it could also remove cash and paper from all its outlets. For a rapidly growing operation of 26 restaurants with more to come, the efficiency savings of implementing this new process would also have the potential to vastly improve its bottom line profitability.”
The Solution – The development of an ‘unmanned, cashless kiosk’ with pointOne EPoS
pointOne had already worked very closely with Tossed as their EPoS supplier for over 10 years. During this time pointOne had already completed a number of customised developments to support the Tossed business model so it was a natural progression to work
with them on developing this new ‘ground-breaking’ technology.
The ‘Kiosk’ – How it works
The Kiosk provides Tossed with the ability to implement a self-service customer ordering and payment solution.
Working on an Android platform, and using 10” tablets mounted in BouncePad holders the Kiosk solution enables customers to simply glide through and browse picture-based menu content and nutritional data, create orders and check-out with integrated contactless card payments in just a few button presses.
Results – A virtually seamless integration into their existing operation with very positive customer feedback
Tossed initially opened two new cash-free stores: Coleman Street and Upper Thames Street in Central London. Both were fitted with self-service kiosks instead of manned tills, and take payment by credit or debit card, contactless and Apple Pay instead of cash.
The Pros & Cons of Going ‘Cashless’
Saves a business money. Going cashless enables a business to focus its human resources on what it does best e.g. preparing and serving high quality food to its customer in the most
efficient way. Increases in the minimum wage last year and a gloomy outlook over the next few years on labour and rents have had operators scrambling to reduce costs using technology.
Can reduce queues and improve revenue.
Using a cashless system can be a fantastic method of reducing queues and improving the customer experience. Using a kiosk system customers can ‘serve themselves’ without waiting for a staff member to become available, which effectively means more transactions can be taken in an hour. The retail sector has proven that customers will use the technology if available.
Accounting systems are more accurate.
As all payments are made electronically either using a mobile phone app or a credit or debit card, transaction errors are virtually eliminated. The payment system integrates directly into your BOH (back of house) system making accounts reconciliation and reporting far more accurate with more meaningful business information.
It creates faster and more secure transactions.
There have been numerous instances of data breaches at retailers since 2012. The way financial data is currently transmitted creates a problematic system of money management and transfers. A cashless business reduces this risk whilst creating faster transactions so that real-time profits or losses can be tracked. In theory, consumer spending patterns could be better tracked as well.
The hospitality industry suffers from fraud in many forms, whether through cash handling abuses or manipulation of EPoS systems for financial gain. However, in a cashless society every transaction leaves an electronic record somewhere, so onsite fraud can essentially be eliminated.
Increased spend per head.
We’ve already seen this happen as the use of credit cards has increased. When physical money isn’t present, people treat it differently. It no longer becomes a tangible item. This means that many consumers end up spending more than they intended to on goods and services.
Whilst the impact of cashless is predominantly positive, there are also some issues that you should be aware of, these include; Over-reliance on technology. Any system that is 100% based around technology may have some drawbacks for example, if a customer’s phone dies and it is their only method of payment then they won’t be able to pay for anything. Also, power outages may have a greater impact if the business is totally cash-less.
Exposure to cybercrime.
Like any other network technology, as you increase your investment you also increase your exposure to potential attacks; the most recent high profile cyber attack in May 2017 has put cyber security back on the radar. However, the security on modern payment systems is very robust and therefore the risk is deemed very low.
May alienate traditional consumers.
As with the introduction of any new process or system there will always be some people that prefer to use ‘good old fashioned’ cash. A business will need to weigh the consequences of this when deciding whether to go completely cash-less.
As cashless technology adoption grows, more data will become available on the demographic and geographic impact. However, opportunities exist for hybrid EPoS solutions whereby you can take advantage of the cashless revolution without saying goodbye to cash altogether.
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