November 5, 2014

Study: Restaurant Customers Favor Payment Technology

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Payment through advanced technology may take over the food and beverage service industry in the not-so-distant future, according to a study conducted by Cornell’s Center for Hospitality Research.

In the study, Prof. Sheryl Kimes, hotel administration, and Prof. Joel Collier, marketing, Mississippi State University, examine the uses and customers views of payment technology — including Apple Pay, Google Wallet and other mobile wallet applications — as a new frontier in customer service.

Kimes said the findings of the study are significant, though the availability of payment technology is not a major factor in consumer behavior.

“[The issue is] what’s it like to go to a restaurant, have a great experience and then it’s finally time to pay for the bill,” she said. “You look around for the server [and try to] get the server’s attention, but it takes forever for the person to get to the table … the process goes on.”

Kimes added that using payment technology may solve some issues that emerge during the customer experience.

“Think about what it would be like to be able to use a tablet that’s on the table to pay, or to be able to whip out your smartphone and use something like Apple Pay,” Kimes said. “It would make things much more convenient … you would have much more control over your time. Basically, customer satisfaction will go up.”

Prof. Rohit Verma, hotel administration, also said he believes that adapting advanced payment technologies will increase the efficiency of service processes.

“It will [also] eliminate unnecessary processing steps and also some of the associated transaction fees for service establishment,” he said.

Prof. Michael McCall, hotel administration, said the application of advanced payment technologies would be an asset for businesses.

“It is huge for convenience … time is a sellable product, and anything that saves time is valuable,” said McCall, who is also editor of the Center for Hospitality Research Report Series at the Center for Hospitality Research.

According to Verma, research supports that the limited positive reflects the adapting nature of payment technology in restaurants.

“Customer preferences for payment technologies are relatively lower at this time probably due to the fact that a relatively smaller number of restaurants are currently using them,” Verma said. “In a companion survey of restaurant operators, we found that currently less than 5 percent of restaurants — from quick service restaurants to fine dining — have implemented new payment technologies.”

However, Verma said that he does not believe this is not indicative of the future of the restaurant industry.

“Close to two-thirds of restaurant operators are in the process of implementing payment technologies within the next two years,” Verma said. “I think [that] within the next few years, the customer preferences for — and use of — new type of payment technologies will increase.”

According to McCall, advanced payment technologies are generally more popular and better received by the younger generations, so he expects its demand to increase.

“Younger consumers are significantly more trusting of technology. … [Just] note the success of high end vending machines for iPads and expensive headsets,” he said.

Referencing her most recent studies, Kimes said that more than 55 percent of subjects under the age of 30 have paid on a smartphone or tablet, compared to 45 percent of subjects over the age of 45 who have paid through a smartphone or tablet.

Kimes added she believes that the results of this study align with the University’s goals towards using technology to improve service.

“The University is very interested in technology and how technology can be applied to improve service,” Kimes said.

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