Categories: Mobile Order Ahead

Social Distancing And Account Takeovers — COVID-19's Impact On QSRs

The mobile ordering industry has steadily gained steam, with nearly 50 million consumers expected to be using food delivery apps by next year. The market is facing the largest crisis it has experienced yet, however, in the form of the COVID-19 pandemic that is spreading across the globe. Stay-at-home orders and dine-in bans are forcing customers to turn to delivery and takeout via mobile apps, and it remains unclear what the industry will look like when the virus recedes.

The Food and Drug Administration (FDA) says that the risk of COVID-19 spreading through food or food packaging is negligible. However, customers still risk infection from person-to-person contact with delivery personnel. Mobile ordering apps are taking steps to reduce this risk, such as allowing deliverers to place the food in front of a customer’s door and leave rather than risk infection during the handoff. Measures like these will be crucial to ensure the safety and financial success of mobile order-ahead.

The April Mobile Order-Ahead Tracker® explores the latest digital ordering developments, including measures that restaurants and delivery apps are taking to continue operating during the pandemic, how some of these steps have backfired and how quick-service restaurants (QSRs) are battling the uptick in fraud attempts.

Mobile Order-Ahead Developments

QSR chains are exploring a number of promotions and initiatives to help them make it through the COVID-19 crisis, which has so far caused 44 percent of restaurants to close either temporarily or permanently. Chipotle, for example, has offered free delivery services through March and April on any order of $10 or more and has leaned heavily on its secondary make lines in its restaurants to meet the surge in demand. The chain also announced a 10 percent raise for all of its employees as they work to satisfy the increased takeout traffic.

Third-party delivery services are also deploying a range of measures to help themselves and their restaurant partners. DoorDash announced that it would waive commission fees for independent restaurants, and is also pumping $20 million into advertising to drive traffic for its partners. The app additionally plans to add 100,000 restaurants to its subscription service DoorDash for free. Uber Eats, meanwhile, is waiving its delivery fees and is donating 300,000 meals gratis to the healthcare workers fighting the pandemic on the frontlines.

Grubhub also took steps in response to the outbreak, but it seems that one of its initiatives has backfired. The app announced a $10 discount on orders of $30 or more, but its restaurant partners swiftly discovered that this discount came out of their profit margins rather than the app’s. Grubhub responded to this furor by saying that the program was opt-in, but the restaurants retorted by pointing out that the process for opting out of the program was needlessly complicated and tedious.

For more on these and other mobile order-ahead news items, download this month’s Tracker.

Small QSRs Remain Resilient In The Face Of Viruses And Fraud

The COVID-19 pandemic has inflicted struggle for all restaurants, but none more so than independent restaurants and small chains lacking the capital to ride out the storm. Another threat besides the lack of business is the increased risk of account takeovers (ATOs), as fraudsters exploit the turmoil to steal customers’ data. In this month’s Feature Story, PYMNTS speaks with Gail Taggart, CEO of the small Chicago, Illinois-based QSR chain LYFE Kitchen about how the chain is countering these twin threats through creative promotions and vigorous fraud prevention efforts.

Deep Dive: QSRs Face Continuous Battle Against Account Takeovers

Customer accounts on QSR and mobile ordering apps hold a treasure trove of data for fraudsters to steal, including payment information, rewards points and stored passwords. These bad actors are leveraging an array of schemes to steal this data for themselves, but few are as pervasive or harder to fight than account takeovers. This month’s Deep Dive examines how fraudsters use phishing, social engineering and other techniques to break into customer accounts, and how developers are fighting back with sophisticated artificial intelligence-based systems.

About The Tracker

The monthly Mobile Order-Ahead Tracker®, a Kount collaboration, offers coverage of the most recent news and trends and a provider directory highlighting key players across the mobile order-ahead ecosystem.

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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