Advantages and Disadvantages of Contactless Payment Methods in Restaurants | Modern restaurant management


Due to the COVID-19 pandemic, it was essential to reduce frequent points of contact in physical stores, including restaurants, bars and cafes. In bathrooms, it’s increasingly common to see touchless paper towel dispensers, hand soaps, and air dryers.

Another contactless feature that many restaurants are adding to their operations are payment methods. More and more alternatives to cash are emerging and restaurateurs must consider the pros and cons of using them to improve the transaction process.

Here are some of the pros and cons of implementing a contactless payment system in your operations, so you can better decide if it is right for your restaurant.

Growing popularity of contactless payment methods

Although contactless payment methods were first introduced in 1995 by South Korea’s public transportation system, the global pandemic has accelerated their adoption in the restaurant industry. Customers and business owners can benefit from their use. One of the main reasons these systems are growing in popularity is the convenience they bring to the table.

The payment method is quite simple: Customers can tap or hold their card or smart device on the point of sale system. Near Field Communication (NFC) technology then captures the card or device information and continues to process the payment. NFC technology uses a radio frequency that allows it to communicate with the restaurant’s point of sale system.

This payment method allows fast, reliable and secure transactions. Customers can avoid waiting for a waiter to deliver their check, execute their credit card, and sign the receipt. It is a much more efficient means of payment than cash or the insertion of a traditional card with entry of the PIN code.

Benefits of contactless payments

Here are some of the benefits of contactless payments that could help your business grow and prosper in a competitive environment.

1. Better customer experience (CX)

CX can make or break your business. People who have bad experiences paying their bills may not come back or convert to loyal customers.

However, if you offer convenient payment methods as a Unique Selling Point (USP), you may have a better chance of retaining your customers. Customer experience is a top priority for businesses over the next five years, and restaurants are no exception.

2. Secure transactions and fraud protection

Contactless payment transactions are secure and encrypted to discourage any hacking attempt. The last thing you want is for a customer to experience fraud or have their information stolen.

When a customer walks into a restaurant, their information must be protected and safe from potential criminals. Using contactless payment options will help secure payments.

3. Improved customer loyalty programs

When customers download your restaurant’s mobile app, they should also be able to connect a credit or debit card to their account. So when they order online or pick up their meal, it’s already paid for.

When customers sit in your restaurant, they should be able to pay for their meal with this app and earn rewards for their purchases. It helps build loyalty with your restaurant and keeps people coming back for more.

Disadvantages of contactless payments

While the benefits of using contactless payments can be compelling, it’s crucial to identify the downsides you might encounter if you decide to incorporate them into your restaurant operations.

1. Age gap in technology adoption

Millennials and Gen Z are known to adopt technology quickly, and there is evidence to suggest that they have steered us into a future of contactless payment.

This bodes well for you as a restaurant or business owner as you will have an easier time attracting these young customers. However, this is a double-edged sword – older populations may not be inclined to use technology to pay their bills. Taking this age gap into account is something you will need to consider.

2. Security issues

While contactless payments are known to be safe and secure for customers, they still come with risk. If a customer’s card is lost or stolen, contactless charges lack the PIN authentication that would typically prevent criminals from getting started. Fortunately, many banks can issue a 100% guarantee for customers who believe their card has been fraudulently charged.

When you know these pros and cons, you are in a better position to decide whether implementing contactless payment methods is right for your restaurant. Many establishments are adopting this new technology to improve their customer service and simplify transactions.

As technology advances, it’s interesting to see which trends hold and which don’t. Contactless payment may have been a fad at one time, but it is slowly taking over the restaurant industry. Describing the pros and cons will help you make the right decision for your restaurant.


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