4/10/2012 10:26:00 AM

Is Cash No Longer King? The Future of How We’ll Pay in Restaurants

Are credit card machines the future? 
When Tony Zazula, owner of New York's Commerce, decided to go cashless in 2009, the restaurant industry was, quite frankly, shocked. What kind of businessman would reject legal tender? “90% of my business was already in credit cards. I wanted to rid myself of the burden of handling cash every day,” Zazula says in defense of his decision. Three years later, he says he doesn’t have any regrets. “For security and convenience reasons, the decision has proven successful.” So successful that the restaurateur is looking into starting a chain of cashless fast-food restaurants in NYC.

Though Zazula claims success, Commerce is the only cashless restaurant in the United States. A restaurant in Washington, DC experimented with going cashless, only to go back to accepting cash; a restaurant in Bend, OR, that stopped accepting cash has since closed. Why is the rest of the restaurant world so slow on the uptake?

“The US is such a cash society,” says Amber Jacobsen, business director of Toby’s Estate, the Australian specialty coffee roaster and café, which recently opened its first US outpost in Williamsburg, Brooklyn. “In Australia everyone likes transferring money around in the air.” Jacobsen explains that in her Australian stores, consumers can order, and pay, cashlessly via their smartphones, even before they arrive to pick up their cuppa. “You load money on an App. Then you can put in your order and pay on the App. You get a text when your order is up and you can walk in the door, bypass the line, bypass waiting for the barista, pick up your coffee and be on your way.” So why hasn’t this convenient technology made its way to the Brooklyn café yet? “Our point of sale system in the US isn’t ready for this technology…yet,” says Jacobsen.

But is it really the technology that’s holding us back from a convenient, cashless future? Starbucks and McDonalds have installed cashless payment systems all over the world, including the US. Turns out, it’s not the consumer who blocking the technology, either. A survey released last week by the National Restaurant Association showed that 52 % of consumers would use at-table electronic payment options and a restaurant's Smartphone app. So the culprit preventing growth in cashless restaurants are fee-shy restaurateurs themselves, says Zazula. “What has to happen for more restaurants to go cashless is the credit card companies need to lower their fees, because whether diners pay on plastic or smartphone, there are big fees levied by the banks and credit card companies they are tied to.”

So, who’s thinking of the restaurateurs? New Yorker Patrick Campi, most recently the owner of Mojo Coffee, is. He’s partnered up with tech-experts to develop a payment system that enables consumers to bypass credit card companies and to load cash to pay on their cellphones. That’s right - cash. The idea was born out of Campi’s personal frustration. “Regulars at Mojo would come in and say, I forgot my wallet…do you take credit cards? And I didn’t. I was too small a business to be spending those fees. Small businesses can easily spend between $30,000-$50,000 a year on these fees - that’s a staffer’s salary right there. So instead of taking cards, I started an old-world system where I’d put what they owed on the ledger and they’d put the money forward. I started to think… why can’t I just digitize this?”

Campi’s App, set to roll out this summer, will allow users to “load” a cash “cloud” on their smartphones to be easily used in restaurants. “It will be good for the merchant, because the App will undercut the credit cards and the other flat-rate fees out there. The merchant will save money, they will turn tables faster, and they will do better business. It will be good for the customer because it is fast, convenient and they will be incentivized to use it through discounts and social networking.”

We’ll see if Campi’s App (he’s mum about the name until it debuts) will be the tech that breaks the greenbacks. Being that his high-tech product is based on old-fashioned hard currency, the verdict seems to be that at restaurants, cash will still be king in the future. It will just be virtual.

1 comment :

  1. Loading cash onto an app would work for me, since that would kind of work like a gift card, and you could do it for restaurants that you frequent habitually. However, I really don't like the idea of cash not an option. I feel that I need to pay with cash more not less - I have gone down the rabbit hole of credit card debt one too many times! It's too easy to not pay attention to your spending when money is virtual.