The Bottom Line
Cash, Credit, Bitcoin? What Forms of Payment to Accept
Cash and credit cards have long represented the overwhelming majority of customer-based restaurant transactions. And now, as the tech world continues to integrate into just about every industry out there, several new payment methods have entered the arena. In the same way that credit cards were new and worrisome back in the day, so too are platforms such as PayPal, ApplePay and cryptocurrency. The question is whether you trust them for your business.
Take some time to ponder whether some of these new payment methods will open up your restaurant to a new customer base, as well as any associated risks that may come with them.
First, revisiting credit cards
Credit cards have undoubtedly become the most universal payment tool of the present time, and in the restaurant world, it takes a very special kind of place to get away with being cash-only. Unless your brand holds enough fame to have a line out the door from opening to close, chances are that you’re losing a ton of business just because you don’t accept credit card payments.
A growing number of people don’t carry cash on them, and in many cases where spontaneity determines a dining decision, guests will much rather go to a place that accepts credit than take the time to go to an ATM—and likely pay a withdrawal fee—to visit a cash-only establishment. Add in credit card rewards and the ease of tracking payments through credit card statements, and the incentive to pay in cash is virtually nonexistent.
Yes, accepting credit card payments requires setting up infrastructure and takes away from profits, but in the incredible majority of cases, the uptick in volume is more than enough to outweigh the marginal costs.
Apply the credit card mantra to other platforms.
In the same way that credit cards overtook the transaction market, several new platforms have built significant user bases and stand to benefit the restaurants [and all vendors, really] that embrace them:
PayPal: The stand-alone money exchange platform also integrates credit card transactions, making it one of the easiest new payment methods for restaurants to adapt. While PayPal may not be as widely used in the restaurant itself, it can prove vital for online ordering. If you’re working with GrubHub or another online delivery service, chances are you’re already savvy enough to be using PayPal.
Venmo: A spinoff of PayPal from the same ownership, Venmo is huge in peer-to-peer money transfer and is making its way into business transactions. Funds go straight into your bank account with minimal processing, making Venmo a prime candidate for increasing efficiency to turn tables over faster.
ApplePay/Google Wallet: Similar to Venmo, these platforms allow guests to make payments straight from their phones. Several of these services exist, with each one requiring its own infrastructure setup. While setup should be quite simple, hosting multiple direct payment platforms may be a bit much to handle for owners not yet familiar with the tech payment landscape.
Bitcoin: Cryptocurrencies have attracted no shortage of press and can stand to serve not just as a payment method, but an investment vehicle for restaurant owners. Imagine guests paying for a $100 meal using Bitcoin in June 2017...that would be a whole lot more than $100 at the time of this writing. Volatility and security are huge issues to consider for any restaurant looking to accept cryptocurrencies, not to mention that a limited number of vendors actually accept cryptocurrencies, making them harder to spend once you have it.
Assess your consumers’ behavior.
While bringing on new payment platforms has great potential, this potential will only be reached if your guests actually use those platforms. Look at your typical guest demographic: If you cater to a younger or more progressive customer base, chances are you stand to profit from a new payment platform.
Check in with your servers to see how frequently guests ask whether you take payment form XYZ. If these requests are significant and consistent, that’s a strong suggestion to bring on the target platform. Have servers or managers ask guests whether they’d prefer to pay with another method if it was made available. If you have an email list, send out a quick survey asking the same thing.
These new payment methods likely won’t replace credit cards any time soon, but having them in addition to credit cards can stand to help you if they align with your guests’ preferences.