The hospitality industry is learning quickly that mobile payments aren't just about transactions. The technology is becoming as much about merchants cutting costs and providing better service as it is about customers paying for purchases.
Several new tools aimed specifically at the restaurant and hospitality industries, which have been the first sectors sectors to see mobile payments take off (think Starbucks), offer merchants the ability to reduce wait times or offer loyalty and rewards programs.
The CEOs and founders of several mobile technology providers — FrontFlip, Breadcrumb and GoPago — provided FastCasual.com, Mobile Payments Today's sister site in the hospitality space, some information on why their solutions are good investments for restaurants.
The customer engagement concern founded just last year in Kansas City by brothers Matt and Sean Beckner already serves casual dining, fast casual and quick-service restaurants in 36 states, including McDonald's, Wendy's, KFC and Famous Dave's.
How it works: After downloading the free mobile app, customers can scan the QR code at a business to unlock a digital scratch card on their phones. Using their fingers, guests "scratch off" the code to see if they've won a prize, such as a discounted dessert or a promotional menu item.
CEO Sean Beckner answered a few questions about why he believes his business is gaining popularity among restaurant operators:
Q: What makes Front Flip different from other loyalty/customer engagement apps?
Beckner:We find that most loyalty programs lack the fun or excitement to drive engagement with consumers. With Front Flip, customers have the opportunity to win with every visit to their favorite businesses.
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When customers scan the Front Flip QR code, they enter the business's loyalty program and mobile marketing cloud. Through our online Command Center, the business can get to know their customers by demographic profile, day part and visit frequency. They can also segment their customers and send them meaningful gifts in the Front Flip app.
Q: How much does it cost?
Beckner: Front Flip is available for a monthly subscription fee, starting at $75 per month.
Q: Why should a restaurant owner get on board with Front Flip?
Beckner: Front Flip puts businesses in control of marketing and customer loyalty, allowing them to increase visit frequency, boost sales and turn their customers into social brand advocates. Businesses also have full control over their prizes and gifts, which helps them introduce guests to new or premium menu items.
Recently acquired by Groupon, Breadcrumb is an iPad point-of-sale solution for restaurants, bars and cafés. Created by a team of hospitality industry veterans, Breadcrumb plans start at $99 per month.
How it works: Employees use the iPad app to search for items or rearrange tables with a finger swipe, and operators may also use the solution to merge or split checks, add or adjust menu items, specify guest notes and modifiers, set employee access levels, manage time-clocks and view real-time sales and labor reports.
Founder Seth Harris answered questions about his system, which is now in more than 100 restaurants, including Empellon Cocina, The Queen's Kickshaw, Amali and the Experimental Cocktail Club.
Q: What makes Breadcrumb different from other iPad POS systems?
Harris: We only focus on hospitality businesses, and there are no scales or UPC scanners that retail stores may need. In addition, Breadcrumb's business and pricing models also set [it] apart from competitors, since we don't use multiple resellers, do not charge upfront licensing fees, and offer a 30-day money-back guarantee which includes 24/7 support with every subscription plan.
Q: Why should restaurant operators use Breadcrumb?
Harris: I'm a restaurant guy, so we started building Breadcrumb by first looking at all the workflows critical to a restaurant operation. We then molded the world's best technology to meet these workflows. All this means that Breadcrumb is the most easy-to-use, powerful and affordable full-featured hospitality POS system on the market today. Operators will enjoy a solution that has all the POS features they need while still being flexible and scalable.
GoPago is a total payment solution that also includes a platform for customer loyalty and engagement. The San Francisco-based company, backed by JPMorgan Chase, was founded in 2009, received funding in February 2012, and expanded nationwide with the launch of GoPago LIVE in August 2012.
How it works: The POS system links a receipt printer, a cash box, and a customer's smartphone to a tablet computer. The system comes preloaded with a menu of products and services offered by the business and all of the functionalities needed to accept cash, credit cards and mobile payments.
CEO Leo Rocco answered questions about the solution, which is already in use by several restaurants, including fast casual concepts Lucky Dogs and Bistro Burger in San Francisco.
Q: What makes GoPago different from other POS solutions?
Rocco: Unlike GoPago, other POS systems provide no customer support and require restaurant owners to purchase all of their hardware (cash box, tablet, printer, etc.) and set up their own Internet connectivity.
GoPago gives all hardware for free and provides 24/7 customer support. GoPago LIVE is also the only POS system that gives customers the option of ordering from their mobile device and skipping the payment line. When transactions are completed through the mobile storefront, GoPago LIVE provides restaurant owners with tools that allow them to automatically track and understand what customers are purchasing. CRM tools also help restaurant operators manage reviews and communicate with customers.
Q: How much does the system cost?
Rocco: There is no upfront investment for the merchant. All equipment (tablet, receipt printer, cash drawer, credit card reader and stand) and Verizon 4G data plan is free. The merchant is charged 5 percent for transactions that come through the mobile storefront (i.e., consumers ordered via smartphone), 2.85 percent for transactions on premise (i.e., credit card is swiped at the location) and 0 percent for cash transactions.
Q: What is the ROI?
Rocco: There is a great return of investment, since the restaurant operator doesn't have to pay any upfront cost for the system. GoPago LIVE gives restaurant owners modern tools that were once only afforded [to] big retailers, and some merchants have already seen up to 25 percent of their sales in a given month come through the GoPago smartphone application.
For more stories on this topic, visit the Restaurants research center.