How QSRs Bring Mobile And Digital Payments To The Table

How QSRs Bring Mobile And Digital Payments To The Table

In the age of quick-service restaurant (QSR) dining technology innovation, restaurants are frantically looking into ways to provide consumers with mobile ordering bells and whistles like third-party payment integrations, rewards programs and surprise-and-delight offers. Some establishments are rolling out proprietary apps, while others are teaming up with third-party platforms to gain revenue.

Their efforts come as mobile ordering is more popular than ever: The volume of orders placed via mobile apps jumped a whopping 130 percent from 2016 to 2018, according to the PYMNTS Mobile Order-Ahead Tracker. The report also noted that mobile orders now comprise roughly 60 percent of all digital food orders. The explosive growth has caused industry experts to forecast that the mobile order-ahead market will reach $38 billion by next year.

From McDonald’s to Chick-fil-A, QSRs are innovating with technology to provide mobile order-ahead and payment options to diners. These are just some of the ways that restaurants and third-party online platforms are making it easier for customers to order and pay for their favorite foods from their mobile devices in the digital era:

Approximately half – or 49 percent – of large, quick-service restaurants (QSRs) allow in-app payments. AlipayHK has teamed with McDonald’s, for instance, to offer payments on the McDonald’s app through smartphones. In addition, AlipayHK users can tap into a quick response (QR) code-based system for special rewards. Jennifer Tan, chief executive officer of Alipay Payment Services (HK) Limited, said per reports in April that she expects mobile payment systems to continue to grow in popularity. “AlipayHK expects that mobile payment services are geared to extensive and in-depth applications and development through the latest cooperation with McDonald’s Hong Kong,” she noted. “Currently, Alipay customers can use the eWallets to make payments in nearly 10,000 restaurants.”

Forty-five percent of customers say mobile options would encourage them to more frequently use online ordering services. At the same time, dining platforms are expanding their offerings. Uber Eats, for instance, has added a Dine-In service. The option appears in the app next to Delivery and Pick-Up in some cities. Customers can order their meals from the menu and then choose to either arrive at the restaurant as soon as possible or schedule an arrival time. The app then shows the customers how long it will take to prepare their meals, as well as the estimated travel time to the restaurant. Diners can then be served as soon as they arrive at the restaurant. Tips can be added at the table or in the app. As an Uber representative told reporters, “We’re always thinking about new ways to enhance the Eats experience.”

A little more than a third – or 34 percent – of online food orders total $50 or more. And online ordering platforms are raising capital: ChowNow, for instance, announced in May that it had notched $21 million in venture funding. The Los Angeles, California startup said in a press release at the time that it had raised the capital via a Series C round of funding, with Catalyst Investors and 3L Capital participating. It was also noted that the company had raised $60 million, including previous rounds from Upfront Ventures, Steadfast Capital and Bonfire Ventures. ChowNow also said that 3L Capital Co-founder and Managing Director Shawn Colo would join the company’s board.

Two in 10 – or 20 percent – of Chick-fil-A’s sales were generated through its mobile app. And when it comes to other digital innovations, the QSR chain was experimenting last year with an electronic butler bell called the Kallpod. Diners could call for a staff member who would receive an alert on his or her smartwatch to help them with a question, find a manager or place a second order. The device came to the chain after Joseph DeCola, a Houston franchise owner, noticed one while on vacation in Hawaii. He brought the device to his store and Devin Deshotel, an area manager, installed it in two locations. With the devices, Deshotel saw improvements in sales as well as survey hospitality scores. “It’s all about the experience of the guest,” he said, per reports last year. “Of course, greater financial returns are great, but that wasn’t the thought process when getting [Kallpod]. It was always about continuing to provide a remarkable experience.” 

More than six in 10 – or 62 percent – of restaurants feel unprepared for the mobile-focused future. And, according to the same survey, over 59 percent of food and beverage leaders agreed that their company faces the threat of disruption from their mobile-enabled competitors. Oracle Food and Beverage Senior Vice President and General Manager Simon de Montfort Walker said, according to an April press release, “The rise of mobile ordering and on-demand food delivery services are completely changing the restaurant and guest experience. In order to remain relevant to a rapidly evolving audience, restaurants must act quickly to modernize their mobile strategy and offerings.”

From McDonald’s to Uber Eats, QSRs and online third-party platforms are harnessing mobile technology to help customers place their orders. Heading into the future, digital restaurant sales are projected to balloon over the coming years – from 6 percent in 2017 to 30 percent by 2025.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.